ATM charges

MPs have warned banks that they are drinking in the last chance saloon over the charges levied on cash machine withdrawals.

 

In a damning report, the Commons Treasury select committee MPs demanded greater transparency on ATM withdrawals and called for banks to comply voluntarily by the end of the year.

 

The committee also warns that free-to-use ATMs could become a thing of the past unless preventative action is taken.

 

Stakeholder Response: Nationwide

 

Stuart Bernau, Nationwide's executive director, said: "This report pulls no punches, and may be the last chance to protect free cash machines in the UK.  Left to its own devices, it is clear that the industry will not act.  The report confirms what Nationwide has been saying all along: that UK consumers are being increasingly short changed - paying £140 million last year alone to withdraw their own cash.  This situation is going to get worse and by the end of this year, we predict the majority of UK cash machines will charge.  This is no time for complacency - the government needs to take this seriously and act swiftly on this report.

 

"Nationwide was the first organisation to call for a code of practice for cash machines, and we are pleased that this report recommends bringing charging cash machines under the banking code. Charging operators will no longer be able to stand in the way of proper transparency improvements which allow the consumer a choice.

 

"On the day it emerged that charging operator Scott Tod is to increase its fees to £1.75 across the board, we hope that the committee's belief that there is no need for a cap on pricing is not misplaced. It's welcome news that the OFT is to be asked to investigate charging operators' contracts.

 

"The Treasury Select Committee's report confirms our view that a threat exists to the future of free cash machines in the UK. The dramatic growth in the number of charging cash machines is an important issue because such charges frequently affect those who can least afford to pay. We urge the government to focus on this issue, act swiftly on the recommendations of this report, and protect the consumer from spiralling cash machine charges."

 

Stakeholder Response: Which?

 

Laurence Baxter, senior policy adviser, Which? said: "Which? is pleased the Treasury Select Committee recognises that easy access to cash, free of charge, must be protected. The massive growth in charging ATMs threatens people's right to get hold of their money for free. Message to banks: Enough is enough!

 

"Our research shows too many people are confused about whether they are being charged at ATMs or not. More than one in four people still don't realise that they will be charged for taking cash out at convenience machines. It's time the industry stepped up to ensure customers understand when they'll pay and how much.

 

"Which? has called on the industry to label all ATMs, both free and charging. A simple red triangle on a charging machine and a green circle on a free one would go a long way to sorting out the confusion amongst the public. We look forward to working with LINK to ensure this system is brought in, as the Committee recommends, by the end of the year."

 

Stakeholder Response: LINK

 

A spokesman for Link said: "LINK welcomes the report from the Treasury Select Committee on cash machine charges and the acknowledgement that it makes of the additional transparency that LINK has brought to charges at cash machines, whilst recognising there is more to do.

 

"LINK has been in the forefront of providing transparency on customer charges and ever since cash machine charges were permitted, customers have always been told of the precise amount of the charge, and been given the opportunity to cancel the transaction.

 

"To increase transparency still further, in April 2004, LINK introduced rules stating that customers must be warned of charges as they approach the cash machine and before they insert their card. After six months’ operation, LINK reviewed the operation of this rule and introduced enhanced rules on signage that come into force in July 2005.

 

"At the end of 2004, LINK also introduced a graded series of sanctions, covering fines, disconnection of machines (with the ultimate sanction of expulsion from LINK) that could be introduced in the event of non-compliance with signage rules. LINK has also introduced a comprehensive series of initiatives to monitor compliance with cash machine signage rules, the first of which will commence in April 2005.

 

"LINK provides the infrastructure that enables customers to withdraw cash from any cash machine (and not just those operated by their own bank). LINK operates within the regulatory parameters set out by the Office of Fair Trading (OFT) under competition law. It is forbidden from having any role in the siting of ATMs, whether or not a charge is made, and the level of customer charges.

 

"LINK looks forward to continuing constructive dialogue with consumer groups and other organisations to improve the operation and transparency of the UK’s ATM network."