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Last Updated: Thursday, 10 February, 2005, 15:18 GMT
Post Office ATMs cost users 10m
A purse
MPs are worried about the impact of charges on poor people
Consumers are spending a total of 10m a year withdrawing money from Post Office cash machines, MPs have heard.

The figure was revealed by Post Office bosses at a hearing of the Treasury Select Committee, which is investigating cash machine charges.

Sub-postmasters can receive as little as 4p from each transaction made on the machines, MPs said.

The Post Office insisted it was not making money from the ATMs and, when charged, fees were capped at 1.50.

About 600,000 withdrawals are made from fee-charging Post office ATMs each month at an average cost of 1.40 a time.

Cheaper withdrawals

The Post Office stressed that fewer people would use the machines in the future, as more people were withdrawing cash free of charge at Post Office counters.

It is important where there are changes levied there should be very clear signage
Stephen Timms, Financial Secretary to the Treasury

People with basic bank accounts, a Post Office card account and certain current accounts can make free withdrawals at Post Offices.

Financial Secretary to the Treasury Stephen Timms, who appeared in a later session, appeared to back the Post Office's position.

"I see no evidence that people on low incomes are having difficulties getting their cash free of charge", he told the committee.

Financial inclusion

There are more than 50,000 ATMs in the UK, an estimated 19,000 of which impose charges.

MPs are concerned that people on low incomes are suffering as a result of the spread of fee-charging machines.

This is because they are more likely to withdraw smaller amounts, more frequently and therefore incur more charges.

FREE CASH WITHDRAWALS FROM POST OFFICES
Basic bank accounts: Withdrawals can be made from a list of providers including Abbey, NatWest and Barclays
Post Office card account: Used to receive benefits, state pensions and tax credit payments
Current accounts: The scheme is supported by Lloyds TSB and Barclays among others, but not by other High-Street heavyweights HSBC, HBOS and Royal Bank of Scotland

John McFall, chairman of the committee, said he was concerned that people who were on benefits could not afford the charges and were losing out.

Faced with a "15 minutes in a queue" people would be tempted to withdraw cash from one of the fee-charging ATMs, Mr McFall said.

He said that in Speke, a poor suburb of Liverpool, where there are few cash machine facilities, 38% of Post Office users were paying for cash withdrawals unnecessarily at its fee-charging ATM.

The Post Office said it was trying to join Link - a network of free ATMs - and stressed it was working hard to promote financial inclusion.

Transparency

Mr Timms said he supported steps to improve fee warnings on machines.

Sharp rise in fee charging cash machines

"It is important where there are changes levied there should be very clear signage so that people are aware of that as soon as possible," Mr Timms said.

He also supported a call for more banks to sign up to a scheme which allows current account holders to withdraw cash free at Post Office counters.

The scheme is not supported by a number of banks, including HSBC, HBOS and Royal Bank of Scotland.

Mr Timms refused to be drawn on at what stage the government could become concerned about the spread of fee-charging ATMs.

However, he said if there were signs of "substantial" change in the number of fee-charging machines there might be "cause for concern" and it could become an issue for the government.

"If there were signs of large-scale changes I would be concerned about it but I don't see that at the moment," Mr Timms said.




SEE ALSO:
More ATMs 'will charge for use'
01 Feb 05 |  Business
Probe into cash machine charges
05 Nov 04 |  Business
Cash machine charges 'escalate'
20 Sep 04 |  Business


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