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Banks Fight Back Against ADA Website Claims



What do financial institutions, restaurants, and clothing stores have in common? They’re the most recent targets of demand letters from plaintiffs’ law firms threatening lawsuits because the institution’s website supposedly violates the Americans with Disabilities Act (ADA). These law firms then offer to improve the accessibility of the institution’s website for a hefty fee. They call it "consulting services;" some banks and credit unions see it differently – calling it extortion and fighting back. The resistance might be working.

The scheme works like this: the bank (often a small community bank with a limited litigation budget) receives a demand letter from a firm purporting to represent a potential customer who’s visually impaired. The letter alleges that the bank’s website fails to comply with the ADA in any number of ways, from font sizes that’re too small to menus that’re too graphical. The firm will typically boast a list of dozens of lawsuits they’ve filed but offer to avoid litigation if the bank agrees to engage the firm to improve its website. The firm’s so-called "consulting fees" range from $15,000 to $50,000—all to settle a single plaintiff’s claim. Paying this fee doesn’t prevent the bank from receiving a similar demand letter the very next day.

These letters understandably aren’t going over well with financial institutions. And the Washington Bankers Association (WBA) recently scored a victory on behalf of its membership in connection with certain of these threatened claims. On March 14, 2017, one of the law firms offering up their services to resolve purported ADA compliance issues—Carlson Lynch Sweet Kilpela & Carpenter of Pittsburgh—agreed to “formally retract the offers made to [the WBA’s] member institutions to negotiate a resolution of our clients’ claims at this time.” This suggests, at least for financial institutions in Washington, that the deluge of threatened ADA litigation over websites may slow.

But even if not, financial institutions have a variety of potential defenses if they are targeted:

  • The ADA does not currently contain any enforceable standards for websites. The Department of Justice (DOJ) is the federal agency that enforces the ADA. But the DOJ hasn’t issued regulations addressing websites...and it doesn’t expect to until 2018.
  • The law firm’s client may not have standing to bring the claim. A plaintiff must have legal standing to bring a claim in court. In other words, there must be a sufficient connection between the plaintiff and the alleged harm. Recently the U.S. Supreme Court expressed skepticism about claims brought by plaintiffs who visit a website only to bring a lawsuit. In Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the U.S. Supreme Court held that a plaintiff must suffer a concrete injury to bring claims in federal court. The injury can’t be “abstract”—it must “actually exist.” In practice, this may mean that a plaintiff must have a connection to the financial institution to have a claim, like being a customer.
  • The plaintiff's firm may be running afoul of professional responsibility rules. Lawyers owe duties of loyalty and confidentiality to their clients. That’s a cardinal rule of legal practice; the rules governing lawyer ethics generally prohibit a lawyer from representing both sides in a dispute. It’s unclear how law firms, purporting to represent injured plaintiffs, can at the same time offer services to the bank (their adversary in the dispute).

Here are some best practices before responding to—or ignoring—an ADA website demand letter:

  1. Check to see if your website complies with the current Web Content Accessibility Guidelines. Although the WCAGs aren’t yet the legal standard, the DOJ may eventually adopt the WCAGs or similar guidelines as the law. You should also evaluate your mobile app, since that could be the next frontier of ADA litigation.
  2. Determine if you have insurance coverage for such a claim. Some policies, like a cyber liability policy, may cover claims based on website inaccessibility. If so, you might be able to tender the demand letter to your insurer (and failure to timely do so may create challenges for seeking coverage down the road if a lawsuit is eventually filed).
  3. Your website vendor may have indemnified you. If you contract out web design, hosting, and/or online processing to a third-party vendor, your agreement may indemnify you against claims based on the vendor’s services. If your current agreement doesn’t contain an indemnity provision, consider negotiating for one when the contract is up for renewal.
  4. Seek legal counsel. Lawyers representing financial institutions have seen these letters before, can help you assess your options, and notify the plaintiff's firm that you’re not an easy payday.