MPs gear up for fresh attack on ATM charges Commons report threatens

THE Post Office and the Link cash machine network are in for a hammering this week when the Treasury Select Committee publishes a scathing report on the explosion of fee charging cash machines.

MPs on the committee, chaired by Dumbarton's John McFall, are deeply concerned that those living in poorer areas are bearing the brunt of these new charges.

Over the holiday weekend, consumers are expected to pay at least pounds-1.5 million to withdraw their own cash, but the committee's investigation has revealed that many of those paying these charges are the least able to afford them.

In Speke, Liverpool, for example, the committee heard that 38- per cent of those withdrawing cash paid a fee for the privilege, even though a very high proportion were on low incomes and benefits.

Angela Eagle, MP for Wallasey said: "It is not acceptable for people, who may be living on low incomes and benefits, to be forced to pay to withdraw their money.

"In areas like Speke, this can amount to big sums of money, millions of pounds over the course of time, being switched out of an area which badly needs that cash."

The committee's hard-hitting report will argue that the Link network, which monitors the nation's network of automatic teller machines (ATMs), is not up to the job. MPs will argue that cash machines should be brought into the remit of the Banking Code.

However, those operating charging machines are to be given one last chance to put their house in order.

Companies charging a fee, of usually pounds-1.50 or pounds-1.75, must ensure a warning notice is displayed prominently on the outside of the machine, so customers are aware of the charge before they begin a transaction. There must be a further prominent electronic warning at the outset of the withdrawal process.

Banks and charging companies will be given until the end of the year to comply, after which MPs will seek strict regulatory action with tough penalties for offenders.

Committee member James Plaskitt, MP for Warwick and Leamington said: "Right now some machines carry no warning at all and where they do they are stuck on at knee high, and buried amid all kinds of marketing notices. Where there is an electronic warning, it often comes at the very last stage of the transaction, just before you get the money. This isn't good enough.

"We are rather sceptical about the banks' attempts to police themselves through Link. They are writing and policing the rules for themselves. There is no incentive to inflict punishment, so it has absolutely no teeth."

Bankers were asked how many times Link had disciplined anyone for any breach of any rule. It had never happened.

The Post Office will come in for a vicious savaging. It operates 1500 charging ATMs, representing 80-per cent of its network.

Despite originally arguing that many of these were installed through individual deals between charging ATM companies and sub- postmasters, the committee found evidence that there had been a national deal signed centrally.

MPs will call on the Post Office to demonstrate it is abiding by its public service duty to provide free access to cash. It will be told to look again at the national deal and explore alternative arrangements with other banks prepared to provide a free ATM.

Plaskitt said: "We are going to put pressure on the other banks which offer basic bank accounts through Post Office counters to insist these accounts can be accessed for free. If they want their customers to use the post office then they have a role to play in ensuring free machines are available."

The Treasury Committee launched its investigation after the Nationwide produced a report showing that the numbers of charging machines had exploded over the past five years, from virtually zero to 40-per cent of the network. We now have 21,000 charging ATMs, compared with 32,000 free dispensers, and the building society estimates that by the end of the year free ones will be outnumbered by those levying a fee.

Barclays Bank estimates Britain will make 25 million withdrawals totalling pounds-1.6 billion from free machines over easter weekend. On top of this we will also make nearly one million transactions from charging dispensers, at a conservative cost of pounds-1.5m.

Copyright 2005 SMG Sunday Newspapers Ltd.
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