Operators of cash dispensers with hidden charges have been urged by MPs to stop deceiving consumers or face harsh penalties.

Bank customers pay £140m a year to withdraw their own money from fee-charging ATMs in corner shops, pubs, off-licences or motorway service stations, a report by the Commons Treasury committee has revealed.

James Plaskitt, a Labour committee member, said: "The charging companies have been charging by deception.

"They have been imposing charges but concealing them from customers who use their machines. If the industry cannot get its house in order, then we will ask the government to change the law."

John McFall, the committee chairman, added: "Good access to non-charging machines should be available to all consumers. It's unfair that some people may be forced into paying £1.50 every time they make a withdrawal."