Charging ATMs in Britain made more transparent |
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Published
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Sat, 02 Jul 2005 10:05
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LONDON: ATM operators in Britain are now required to tell customers whether they are liable to pay a charge or not for withdrawing money through the machine. The rule, which comes into force Friday, also stipulates that the ATMs must clearly indicate the charges if any before customers insert their cards. Defaulters will face heavy fines and even disconnection.
All the charging ATMs will have to display notices saying "This machine will charge you for Link cash withdrawals" close to the ATM screen in a contrasting colour to the background.
Currently the system is to tell the customers about the fee after the transaction is initiated and to give them a chance to cancel a withdrawal.
The network that oversees the operations of the country's 55,234 cash dispensing machines, LINK, will enforce this guideline that comes after the Treasury Select Committee in April criticised the ATM operators for the lack of transparency on withdrawal fees. Some 20,000 ATMs levy charges ranging from £1.5 to £5, and in some cases, even £10 per withdrawal.
The Treasury Select Committee had investigated the matter in the wake of complaints made by Nationwide Building Society and consumer body Which? that there has been an increase in the number of ATMs levying charges for cash withdrawal.
At the moment, there is no upper limit prescribed for the fee. There has been demand from the public to set a maximum limit on the charges, to make non-financial transactions free and to provide clear indication in case there is any change in the charges.
Nationwide's director Charles Reed welcomed the step, but said it is not sufficient. "Day by day consumers' right to access cash for free is being eroded by the rapid growth in charging machines and by the fact that there is no cap on the charges. For some people the convenience of being able to withdraw cash when and where they need it outweighs the charges but the fact is that people on low incomes, who may need to make more frequent withdrawals, can be particularly hard hit."
Nationwide has demanded a cap on charges, free ATMs in public spaces and further improvements on transparency. It also wanted the government to control the growth of charging machines, introduce a provision for charging machine operators to give 30 days' notice in case they plan to introduce a charge and make it mandatory for these operators to sign up the Banking Code.
The Treasury Select Committee report, published in March, had criticised the Post Office for introducing levy-based ATMs. It recommended that Post Office branches should place signs next to their charging ATMs to inform customers that free withdrawal facilities are available at the counter. The government is considering the committee's recommendations and it is likely to take a decision next month.
Link has 51 members, including HSBC, Abbey and Lloyds TSB. Almost every bank and building society customer uses the network to withdraw money. The charges are decided by the organisation that provides the machine. Link's rules bar double charging -- a card issuer cannot charge for a cash withdrawal at another company's ATM that applies a fee. Similarly, an ATM owner cannot charge for a cash withdrawal where the card issuer charges a cash advance fee.
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