Bank rip-off at cash machines

NEARLY half the cash machines operated by Alliance & Leicester charge customers of other banks £1.50 for a withdrawal, it has emerged. The A&L has 1,100 fee-paying machines - many in post offices - and a further 1,400 that are free for clients of all banks.

It is at the forefront of an explosion in the number of hole-in-the-wall outlets that make users pay to take out their money. Some 20,000 of Britain's 50,000 cash machines charge, with the number increasing sharply every month.

The A&L is the major provider of machines to the Post Office, with some 400 of the 1,000 it supplies carrying a charge.

Consumer groups and MPs feel this unfairly penalises the poorest in society. They point out that cash machines in post offices might be the only way that pensioners and the disabled can withdraw their money.

Major banks are removing free machines from many locations, allowing firms which charge to move in. Some, such as HBOS, have collected a multi-million pound windfall by selling hundreds of machines to companies which charge.

The RBS-NatWest group last year bought the biggest network of charging machines, Hanco, allowing it to directly profit from fees.

The Commons Treasury Select Committee has begun an inquiry into the rise of fee-charging cash machines amid concern that the network of free outlets is effectively being dismantled. Post Office bosses are due to go before the committee next week to defend the charging regime.

Laurence Baxter, policy expert at consumer watchdog Which? said: 'Consumers should not be denied free access to their own money.' Charges imposed at most machines, ranging from £1 to £5, were 'extortionate' compared to the average 30p cost of managing such a withdrawal. Baxter added: 'We would like to see a sliding scale of charges and a cap.'

A spokesman for A&L said: 'We only install a convenience fee (surcharge) machine where it would not be economically viable to offer one free of charge. We think it is better to at least give consumers the choice of using the machine, albeit with a small fee, than have no machine at all.'

The bank said warnings about charges were clearly displayed on machines and screens.