Threat of spreading cash machine fees

FEARS were voiced last night that the major banks still intend to introduce charges for using their cash machines.

The concerns came after the 'Big Four' blocked moves to put warning signs on the growing number of machines which make customers pay to access their money.

Charging is already being introduced by stealth, with one in four machines now imposing a fee of up to £1.75.

The issue last came to a head three years ago when the banks announced they would bring in charges throughout the system. But after a Daily Mail campaign, they backed down and pledged not to do so.

The renewed controversy has arisen after the Nationwide building society - one of the few operators to oppose charging - drew up the warning signs idea. It outlined its plan at a meeting of Link, which co-ordinates policy for the country's 43,245 machines, on Tuesday.

But the major banks, including Barclays, RBS, Lloyds TSB and HSBC - which all enjoyed multi-billion pound profits last year - voted it down.

A Nationwide spokesman said: 'Our concern is that the increase in the number of machines which are charging, coupled with this refusal to accept warning signs, suggest the banks want to go back to the idea of widespread charges. We are moving towards a situation where only those machines in a branch will be free and all the others - at shopping malls, petrol stations and elsewhere - will carry a fee.'

Nationwide executive director Stuart Bernau added: 'We just can't see why Link members have rejected this out of hand - it's very disappointing. This was a real opportunity to help consumers and clear up some of the confusion that exists over which machines charge and which don't. Our simple solution would not have been difficult to achieve, would not have restricted consumer choice or in any way damaged the cash machine industry.'

Nationwide wanted a sticker or sign on fee-charging machines so users could decide whether to withdraw money before inserting their cards.

At present, they are not advised of a charge and only given the opportunity to abort the transaction near the end. Often people agree to paying at this late stage rather than look for another machine.

Banks have shut down thousands of cash dispensers across the country. These are being replaced by ones with charges. As a result, the proportion of machines which carry a fee has risen from 3% to 25% (872 to around 11,000) in three years.

Abbey National has closed 38 branch machines and 190 in locations such as supermarkets and motorway service stations. At least 50 of these sites have been taken over by the Moneybox company, which imposes what it calls a 'convenience fee' of £1.50 per transaction.

Lloyds TSB has shut down 103 machines in the past two years, leaving the way clear in many areas for firms such as Moneybox.

Alliance & Leicester imposes a fee at 1,130 locations away from its High Street branches, although it does not charge its own customers.

Last night, Link chief executive John Hardy said the warning sign idea was still alive. He suggested Nationwide was trying to score points against rivals, saying: 'Nationwide put forward a proposal in principle, but there are a number of practical problems. This is not dead. We have remitted it to a sub-committee for investigation.'

Barclays says the number of machines it runs has remained stable at around 3,900 in the last year, and it is prepared to further examine the idea of warning signs.

Tesco has pledged to keep fee-charging ATMs out of its stores.