Cash machines
Banks are re-introducing fee-charging cash machines "by the back door", consumer groups have told MPs.
Members of the Treasury select committee, who launched an inquiry into spiralling fees, were told that the rise was highlighted by the sale of HBOS's 816 non-branch cash points to Cardpoint, which charges a fee, earlier this year.
Select committee response
John McFall chairman of the Treasury select committee said: "The opaqueness of information provided is driving people to the charging machines."
Stakeholder Response: Which?
Laurence Baxter, senior policy adviser at Which?, said: "The present labelling on cash machines is clearly not good enough. Which? has proposed a standardised badge clearly showing charges.
"Which? also feels a charge of £1.50 per withdrawal is grossly disproportionate to the true cost of the transaction and is calling for charges to be capped.
"Which? is also concerned that consumers will be forced to pay, regardless of labelling. If other banks do as HBOS did this year in selling off ATMs, free ATMs may quickly become something of the past."
Stakeholder Response: Nationwide
Stuart Bernau, Nationwide's executive director, said: "
"If the number of fee-charging machines continues to grow at its current pace, it is likely that by next Christmas, there will be more fee-charging machines than free ones. Nationwide has also found that 1600 free machines have a charging one within 100 metres, proving that the fee-charging machine operators are not restricting their installation to remote locations.
"Nationwide is committed to its free cash machine network and while our competitors are selling their machines to fee-charging operators, we are adding extra services to ours. For example, customers can top-up their mobile phones at many of our machines.
"We welcome the Treasury select committee's inquiry and hope a code of practice can be devised which will make it easier for consumers to differentiate between charging and free machines. In the meantime consumers need to be wary when taking cash out of ATMs and boycott fee paying machines whenever possible."
A spokesman for Link said: "A small number of banks have sold a relatively small number of cash machines to independent deployers.
"Despite this the number of free cash machines continues to increase although the market for such machines is mature.
"The number of fee charging machines is increasing at a faster rate – one reason for this is that the market for convenience machines is new and still developing.
"About 38 per cent of cash machines in the
"ATMs are relatively highly fixed cost in nature and hence the unit cost of a transaction varies as a function of the annual operating cost and the number of transactions.
"Free machines depend on an interchange fee paid by the card issuer to the ATM owner (the acquirer): this is set on a cost reflective basis and in general such machines process very large volumes of transactions – hence the unit cost of a transaction is modest.
"Most fee charging machines are in sites capable of supporting fewer transactions and hence the unit cost of a transaction is much higher – the machines therefore need to charge a fee.
"LINK rules require a notice to be displayed on the machine indicating that a charge will or may be made: this will be upgraded next year to ensure that there is both a physical notice on the machine and the screen at the start of the transaction, both indicating the charge.
"Because retail charges (fees raised by either the card issuer or the ATM owner which are paid by the customer) are outside LINK’s remit, and because LINK members have agreed there will never be more than one retail charge applied to a transaction, the surcharging ATM, in the course of a transaction needs to ‘check’ with the card issuer whether or not the issuer wishes to raise a charge and then apply a piece of logic to ensure that only one charge is made. The customer can only therefore be informed of the exact charge part way through the transaction.
"LINK is, of course, sympathetic to the plight of the disadvantaged but points out that action to ensure free banking or access to banking for the poor is a matter of social policy."
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