Intolerance & Money: Paying Banks to Get At Your Own Money

Consumers will be hit with a quarter-billion-pound bill to withdraw their own cash next year, as fee-free cash machines come under increasing threat, according to a new report. Despite increasing criticism from the public and politicians, the number of cash-points which charge up to 5.00_GBP/transaction is soaring -- up more than 3_000 in the last 12 months. 'Nationwide Building Society' predicts that consumers will pay 200_million_GBP in fees this year, and that the figure will surge 25 per cent to 250_million_GBP in 2006. Consumer groups last night condemned the development, saying that, in many parts of the country, consumers had no option but to pay to access cash. But 'LINK', the UK's national cash machine interchange network, said most of the new machines were being installed in locations where there were none previously, giving consumers more choice -- not less. The study from 'Nationwide' found that one in 20 cashpoint transactions now incurs a charge, up almost 40 per cent in just eight months. The number of charging cash machines has risen nearly 16 per cent in the past year, as the number of those that are free to use declines.
'There are fewer free cash machines than there were this time last year and more charging machines,' said Mr.Stuart Bernau, an executive director at 'Nationwide', a staunch opponent of fee-charging automatic teller machines (ATMs). 'If this pattern continues, there's a real possibility that free access to cash will not survive, other than at bank and building society branches and a few other locations, such as main Post Offices.'
Customers are currently charged at 43 per cent of the UK's 56_286 ATMs -- a figure that has risen from 39 per cent this time last year and compares with virtually none just six years ago. 'Nationwide' believes the trend will continue -- and that half of ATMs could charge customers by the end of 2007. That could see the proportion of total withdrawals that incur a charge surge to 40 per cent. Fees charged for withdrawing cash range from 1.00_GBP to 5.00_GBP and are also on the up. They have increased 2.6 per cent in the past year: the average fee stood at 1.57_GBP at the end of 2005-10, compared with 1.53_GBP a year ago, according to data from 'LINK'. The changes are deeply unpopular with the public, with 93 per cent regarding it unacceptable to be charged to withdraw their own money -- up from 89 per cent 12 months ago. The Treasury select committee's own report into the charges in 2005-03 expressed concerns that free access to cash could decline and 'Nationwide' expected MPs to back an 'early-day motion' in support of its call for action to protect free cash machines. That will take place at 'The House of Commons' reception on Wednesday, 2005-11-16, hosted by Mr.John Robertson MP for Anniesland, Glasgow. Consumer watchdog 'Which?' branded the charges 'unfair', saying consumers had 'a right to access their money for free'. Principal researcher Mr.Mike Naylor said:
'Free machines are disappearing and charging ones increasing and there's a real danger that people will have no choice. 'We're really concerned about people being left with the only option of using a charging machine and the continued sell-off and closure of free machines.'
The 'Nationwide' report also shows that more than a quarter (27 per cent) of paid-for withdrawals are for 20.00_GBP or less -- leading to the less affluent being 'hit disproportionately hard', the 'National Consumer Council' said.
'Consumers now pay charges at two in five cash machines' said the deputy director of policy Ms.Claire Whyley. 'This situation is unacceptable. 'It's essential that people have easy and cost-free access to their money. 'ATM charges are simply another example of the poor paying more -- in this case they're paying a high price just to access their own money.'
The UK's main operators of fee-charging machines include 'Hanco', owned by 'The Royal Bank of Scotland', independent firms 'Moneybox', 'Cardpoint' and 'Paypoint', as well as 'Alliance & Leicester' and 'The Co-operative Bank'. They have been buying up bank-owned machines in their hundreds, with 'Cardpoint' paying 75_million_GBP for 816 HBoS cash-points in 2004 and 'Moneybox' acquiring 50 ATMs from 'Abbey' in 2003. Concerns are mounting that operators will continue to buy remote sites that are currently free -- at motorway service stations, universities, hospitals and train stations, for example -- where access to cash is already limited.
'Lots of communities have lost branches; they've lost free machines and their only access to cash is a charging machine,' added Mr.Naylor. 'The industry has to step up and tackle that.'
The consumer body and 'Nationwide' have been lobbying for clear signage on cash machines -- with free ATMs carrying a green sign and charging cash-points a red one.
'We're seeking to bring about genuine transparency at charging cash machines,' added Mr.Bernau. 'There's widespread and cross-party support for the use of standardised green and red signs that would make it much easier for consumers to spot at-a-glance if a machine is free or charges. 'It's now time for the industry to act.'
However, 'LINK' branded 'Nationwide's' forecasts 'alarmist'. Card scheme director Mr.Edwin Latter said:
'In many cases, if there wasn't a charging cash machine, there would be no cash machine.'
He added that it was 'important' for consumers to have free access to cash and said firms would be hit with fines every time they flouted tougher rules on fee transparency, introduced at the start of 2005-07. 'A tale of two cash machines 100 yards apart ', Jennifer Hill, The Scotsman, 2005-11-12, Sa Links: Royal Bank of Scotland Scottish Banking


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