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Single electron transistors (SET) featuring metal (Ni) electrodes and silicon nitride dielectric barriers prepared by atomic layer deposition are fabricated and tested. Electrical characterization of the devices reveals electrostatic energy parameters consistent with the parameters of the designed tunnel junctions. In addition, an analysis of temperature dependence of conductance confirms the formation of metal-insulator-metal (MIM) junctions with negligible in-series contribution of any surface native metal oxide. However, the fabricated devices exhibit a very high level of electrical noise, far exceeding the commonly observed shot noise. Experimental investigation reveals the random telegraph signal (RTS) nature of the observed excess noise. The RTS noise in electronic devices is commonly associated with charging of external traps that are electrostatically coupled to the SET island. In the devices under study, however, the defects that result in the observed RTS noise are demonstrated to reside within the tunnel junctions. Our results also indicate the critical importance of interface states and surface preparation for achieving good performance of the SETs fabricated using ALD to form the tunnel barrier.