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Last Updated: Thursday, 16 February 2006, 14:49 GMT
'Buck passed' over bank charges
Person using a cash machine
More than four in 10 cash machines charge a fee
A powerful Labour MP has accused the banking industry and the government of "passing the buck" over consumer warnings on charging cash machines.

John McFall, chairman of the Treasury Select Committee, told a parliamentary hearing that cash machine fee-charging was surrounded by a "veil of secrecy".

Mr McFall added that consumer warnings on charging machines must be clearer.

The committee has been investigating the rapid spread of cash machine charges and the effect on consumers.

The vast majority of new cash machines installed in the UK charge users a fee.

In total, nearly 22,000 of the UK's 54,000 ATMs levy a cash withdrawal fee and increasing numbers are being put in newsagents and convenience stores.

It seems that the industry, the OFT (Office of Fair Trading) and the individual government departments are passing the buck
John McFall MP

In general, consumers using fee-charging machines have to pay about 1.75 to withdraw cash.

Operators argue customers can choose whether or not to use their machines.

Opponents, including Which? and Citizens Advice, argue that charges hit people on low incomes hardest, as these people are more likely to make smaller, more frequent withdrawals and are therefore bearing a disproportionately large share of the charges.

Clearer signs

Last March, the Treasury Select Committee issued a report calling for clearer warnings on fee-charging cash machines.

But in its response to the committee's report, the government gave fee-charging ATMs the all-clear, pointing out that the vast majority of them 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.

Speaking at a Westminster Hall debate on the issue, Mr McFall said that the warnings on fee-charging cash machines were still not up to scratch.

"When I go to a petrol station, I see a clear sign in large numbers showing the price per litre," Mr McFall said.

"The question we were asking is why can there not be a similar high standard of transparency for cash machine charges."

"It seems that the industry, the OFT [Office of Fair Trading] and the individual government departments are passing the buck, rather than engaging in a serious and systematic analysis of the issue," Mr McFall concluded.

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