Post Office under fire for cash machine windfall

CONSUMERS are paying up to £10m a year to withdraw their money from Post Office-based cash machines.

The organisation has fee-charging machines at 2,500 of its 15,000 branches, the majority of which charge up to £1.75. However, sub-postmasters only receive around 4p per transaction.

The figure was revealed at today's session of the Treasury Select Committee hearings into fee-charging ATMs, in which the Post Office was heavily criticised.

Committee chairman John McFall accused the Post Office of failing its responsibility to promote financial inclusion. He said: 'Sub-postmasters should be able to decide whether they have free machines. Given that banks are introducing free machines in their branches, the Post Office seems the only financial institution going in the opposite direction.'

McFall said the Post Office should do more to promote its free counter withdrawal service. The company has a deal with the majority of banks to allow their customers to withdraw money free of charge over the counter, but several major organisations, including HBSC and HBOS, are not members of the scheme.

McFall said: 'Although some of these people won't want to queue, I would think it shows a need for clear signage.'

Post Office chairman Sir Michael Rose defended the charges, pointing out that they are set by the Alliance & Leicester. He claimed the organisation was pushing to join the Link network and hinted fee-based machines could be withdrawn.

He said: 'Our philosophy is that people should be able to access their cash over the counter. We would like all the banks to participate but our next attack is to join the Link network.

'A lot of the existing ATMs are just not viable because of the number of transactions going through them. The choice is whether to pull them out or to have them [charging machines] there as a convenience alongside being able to withdraw money over the counter.'

Stephen Timms, Financial Secretary to the Treasury, said the Government was not unduly worried about the spread of fee-charging cash machines.

He told the committee: 'The key thing for me is that people on low incomes should be able to access cash for free. We will certainly keep an eye on developments but I don't see anything at the moment that gives undue cause for concern.'