£140m cash machines charge

BANK customers are paying £140m a year to withdraw their own money from cash machines, MPs warn today. Charges have grown almost fivefold, from £30m, in just five years, according to a Commons report.

Free machines could soon be a thing of the past outside a dwindling number of bank branches, the MPs predict.

They accuse fee-charging machine operators of hiding warnings and criticise the Post Office and publicly owned sites such as hospitals and stations for installing machines that customers must pay to use.

More than one in three cash machines, also known as ATMs, now charges, according to the Treasury Select Committee. Such machines have multiplied in motorway service stations, shopping centres, bars and cinemas. But warning stickers are often hard to see and on- screen alerts flash up only just before consumers withdraw cash. Charging machines prominently advertise the ability to make 'free balance enquiries' in an attempt to mislead consumers, the MPs say.

They want all independent operators to sign up to the Banking Code, as the existing umbrella body, Link, is 'inadequate'. The report says operators who charge are forcing free machines out by offering the owners of the places where they are sited 'financial inducements', while banks sell off many of their machines.

HBOS sold 816 non-branch machines to the operator Cardpoint last year for £50m. Cardpoint plans to introduce charges for at least 250 of them.

'Ultimately, free ATMs could be restricted almost entirely to bank branches...which could have a serious impact on those living in communities without a bank branch, particularly those who are less mobile,' the MPs say. They are concerned at the number of public sector sites that now charge for withdrawing cash. Just 11 of the 268 machines on military bases are now free to use.

Their report also urges the Post Office to review its policy - three in four machines in its branches now charge. Committee chairman John McFall said: 'It's unfair that some people may be forced into paying £1.50 every time they make a withdrawal.

'Banks need to ensure that their commitment to free machines extends beyond their branch network. We are already paying £140m a year to access our own money. This is a very worrying trend and one that should be monitored closely. It would be wrong if every withdrawal was to hit consumers in their pocket.'

Consumer groups hailed the report as a 'major milestone' in the battle to ensure free and easy access to customers' own money. Laurence Baxter of Which?, formerly the Consumers' Association, said: 'Our research shows the vast majority of people are utterly confused about whether they are being charged at ATMs or not.

'More than one in four people still don't realise that they will be charged for taking cash out at convenience machines. It's time the industry stepped up to ensure that customers understand when they'll pay and how much.'

The Post Office attempted to dismiss the criticisms. Director Graham Halliday said: 'More than one million free cash withdrawals are being made every day at the Post Office's 15,000 branches, and a large number of these transactions are being made by some of the most vulnerable and disadvantaged people.'

He insisted that the Post Office did not make any profit from cash machines and that it has insisted charges are capped at £1.50.