UPDATE 2-TD Bank to retire coin-counting machines after reports of errors

(Adds background on machines)
By Karen Freifeld
NEW YORK, May 19 (Reuters) - Toronto-Dominion Bank's TD.TO
TD Bank will retire its Penny Arcade coin-counters, the company
said on Thursday, in the wake of lawsuits claiming that the
machines were short-changing customers.
The counters, which featured a female cartoon character on
their video screens, allowed customers to swap loose change,
even in large amounts, for paper currency. They were originally
created by Commerce Bank, a New Jersey lender that TD bought in
2008.
In recent months, the Canadian lender has been sued and
featured in news reports saying that the machines failed to
count accurately.
In one proposed class action filed last month in Manhattan,
New York customer Jeffrey Feinman said a Penny Arcade credited
him for just $25.44 when he deposited $26 of coins, and $30.05
when he deposited $31 of coins.
"We have determined that it is difficult to ensure a
consistently great experience for our customers," Michael
Rhodes, TD's head of consumer bank, said in a statement. "We
will continue to assess the Penny experience and intend to
appropriately address customer impact."
The bank had taken the machines out of service in early
April for retesting following media reports about the problems,
and had aimed to eventually bring them back.
Rhodes said the reports of performance issues led the bank
to reassess the machines. He noted that the number of people who
used them had fallen in the last few years.
The bank said it would still accept pre-rolled coins in
exchange for paper money.
Feinman's lawsuit claimed that the Penny Arcades counted 29
billion coins in 2012. The service was free for TD account
holders, while others were charged an 8 percent fee.
Penny Arcade's problems "affected not only commercial
customers of TD Bank, but also those children that brought in
their 'lemonade stand' money to deposit in their savings
accounts," said Michael Criden, a lawyer who filed a proposed
class action last month in federal court in Miami.
TD spokeswoman Judith Schmidt declined to discuss pending
litigation.