21/09/2004

Fee charging ATM's cost consumers £60m a year

More than one third of high street cash machines charge users and fee charging ATM's now cost consumers more than £60 million each year, according to a report published today.

The Nationwide Building Society's special report into the UK's free ATM network has found that over the past six months alone the number that charge has increased by 40% from around 13,000 to around 18,500.

Over a quarter (26.9%) of those withdrawing cash from a charging machine have taken out £20 or less which, with a typical charge of £1.50, means their withdrawal cost at least 7.5% of the sum withdrawn, the survey found.

Five years ago virtually all cash machines in the UK were free, but the majority (64%) of the 5,635 new cash machines installed in 2003 were fee charging. If this rate of growth continues, it is only a matter of time before fee charging machines outnumber free machines, the report concluded.

Nationwide said that providers of fee charging cash machines have been "pursuing an aggressive expansion strategy" and in some cases were "poaching sites" where banks or building societies currently operate free machines.

But worryingly, a third of users are still unaware that they need to look out for stickers or on-screen messages that should warn them of charges. And 97% of people surveyed believe that the visibility of these warnings should be improved.

Stuart Bernau, Nationwide executive director, said he was concerned that the UK's network of free cash machines was under threat, but conceded that charging machines had a "valuable role to play" in locations where free machines would not be viable.

"This is a serious issue for consumers particularly as machines that were free are being replaced with ones that charge, so it is very easy for people to be caught out and face an unexpected fee," he said.

"We remain committed to retaining a viable network of free cash machines in the UK and will continue to work with the industry to identify threats to this network and promote public debate on ways to overcome such threats. Nationwide believes the industry and consumer representatives need to start this debate now if the UK's free cash machines are to remain. As a starting point we have proposed a new code of practice which we plan to discuss with the industry and other interested bodies."

The largest operator of fee charging cash machines, Hanco, has recently been acquired by Royal Bank of Scotland. HBOS and Abbey have both sold some of their non-branch machines to companies that run fee charging networks, according to the study.

(gmcg/mb)

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