Government under fire over fee-charging ATMs

Government under fire over fee-charging ATMs

The UK government is under fire from consumer groups after saying it welcomes the rising number of fee-charging ATMs across the country and dismissed the threat to free machines.

In its response to the Treasury Select Committee's inquiry into cash machine charges, the government says it "welcomes" fact that the ATM industry has been opened up to independent operators, which has led to the spread of fee-charging ATMs across the country.

Consumer group Which called the government's comments a "cop-out", adding that the "see no evil, hear no evil" approach to cash machine charges seems to be continuing.

Five years ago virtually all ATMs in the UK were free, but according to government figures around 20,000 machines now charge customers an average fee of £1.75 for withdrawing their own cash.

Laurence Baxter, senior policy advisor at Which? says: "Knowing the banking industry does not excel at providing a fair deal for all its customers, the onus is on the government to stop putting blind faith in the ATM industry.

"It must step in to ensure banks provide free cash machines in all areas, particularly deprived communities."

But the report says the fact that there are now over 30,000 ATMs in the UK that are free to customers of all banks and building societies and that over 96% of ATM withdrawals are free of charge shows "a very significant improvement" in this situation: "There are now approximately 20,000 charging ATMs, the vast majority in locations where previously there was no cash machine."

The government says it does not believe that free ATMs in the UK are under threat, adding that the number of free machines is still increasing at around three per cent per annum.

The report also says that the major banks have made it clear that they have no plans to sell off any more of their ATM networks. But Stuart Bernau, executive director at Nationwide Building Society, which has been campaiging for the introduction of clearer labelling of fee-charging machines, says charging operators have already converted free machines from HBOS and Abbey, and even Nationwide has been approached about selling machines.

"The Treasury Select Committee heard from the charging operators themselves that they will grow their share of transactions if they can," says Bernau. "Consumers will pay more than £200 million this year to withdraw their own money from cash machines. We believe that without Government action we could be looking back in five years and saying 'Remember when access to cash was free?'. We need action now to protect the free network and we think this is a missed opportunity."

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