Cashing in: Banks accused

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.

Link, the organisation which runs the cash machine network, will be criticised over its failure to ensure banks and other cash machine operators offer clear warnings of the withdrawal charges.

Many shops, pubs and nightclubs now offer ATM machines which charge customers to withdraw their own money.

Of the 54,000 ATMs in the UK, some 20,000 now charge customers - with the number rising on a weekly basis.

The Post Office also comes under fire after MPs discovered that 75 per cent of cash machines in its branches charge customers for withdrawals.

Committee chairman John McFall said: "We recommend the Post Office urgently re-examines its policy towards charging ATMs," he said.

"It is out of line with the banks, which don't charge at machines on their own premises.

"The Post Office should give more thought to the needs of the local community before introducing ones that charge."

Charges vary between £1.00 and £1.50 although some providers charge as much as £10.

The committee says the charges affect the poorest customers who are forced to use the machines, although the operators say they offer convenience for people who otherwise may have to travel to withdraw cash.

In some remote areas the population is now entirely served by fee-charging ATMs.

Whilst the committee stops short of calling for a cap on fees, it calls for urgent action from banks and other providers.

The National Consumer Council urged MPs to act to give "people a fair deal for withdrawing their own cash".