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Last Updated: Tuesday, 19 July, 2005, 15:40 GMT 16:40 UK
Fee-charging ATMs given all-clear
Person using a cash machine
More than four out of 10 cash machines charge a fee
Fee-charging cash machines (ATMs) are aiding rather than hurting consumer choice, the government has said.

The government welcomed the spread of over 20,000 fee-charging ATMs as convenient and not posing a threat to the free-to-use machine network.

But it added it would monitor fee-charging ATMs to ensure that they did not replace free-to-use machines.

The government was responding to a critical Treasury Select Committee report into fee-charging ATMs.

Clearer warnings

In March, the MPs called for clearer warnings on fee-charging cash machines.

Consumers will pay more than 200m this year to withdraw their own money from cash machines
Stuart Bernau, Nationwide

The committee expressed concern that fee-charging machines tended to be located in poorer areas of the UK, often in places where traditional High Street banks have left.

Overall, consumers now pay 140m a year to access their own money, the committee's report concluded.

According to the Association for Payment Clearing Services (Apacs), more than four out of 10 UK cash machines are now operated by independent firms, nearly all of which charge a fee for withdrawals.

In general, consumers using fee-charging ATMs are charged 1.75 to withdraw cash.

But in its response to the committee's report, the government said that the vast majority of fee-charging ATMs were in locations where there had never been a free cash machine.

However, the government stressed that cash machine charges should be made clear so that consumers could make an informed choice.

Opponents

The government's response was described as "disappointing" by opponents of fee-charging ATMs.

"Consumers will pay more than 200m this year to withdraw their own money from cash machines," said Stuart Bernau, Nationwide Building Society executive director.

"We believe that without government action we could be looking back in five years and saying: 'Remember when access to cash was free?'"

Consumer group Which? branded the government's approach as "see no evil, hear no evil".

The government's comments came as the Post Office announced it was to install 1,000 free cash machines after signing a deal with the Bank of Ireland.

The Post Office had been singled out for criticism in the Committee's report for installing charging ATMs in its branches.


SEE ALSO:
Q&A: Cash machine charges
31 Mar 05 |  Business
UK 'risks' US-style bank charges
21 Mar 05 |  Business
Post Office ATMs cost users 10m
10 Feb 05 |  Business
Probe into cash machine charges
05 Nov 04 |  Business


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