Next-generation cash machine charges £10

Britain's biggest bank has deployed a cash machine that can charge customers up to £10 per withdrawal.

The Royal Bank of Scotland's Hanco subsidiary has been issuing the high-charge dispensers that can charge up to £10 per withdrawal.

The network of Hanco machines has grown to more than 6,000 active systems, fuelling concerns that Banks are seeking new ways to smuggle in withdrawal fees that exceed the rate £1.50.

Official figures show that the number of charging cash machines has increased rapidly in the past four years, from 6,998 in 2001 to 21,240 today.

This means that 40 per cent of Britain's available machines are charging fees, in order to cover the small operating cost of providing the system - 31p.

"We are seeing a growth of these machines by stealth," said John Mann, Labour MP, who is part of the committee due to investigate the charges.

"The banks keep finding extra ways of squeezing money out of consumers," he told the Sunday Times.

"They are clearly trying to ensure we all have to pay to get out our own money out of cash machines."

His concern reflects an appeal made last month by Citizens Advice, which said flat rate charging often has a disproportionate impact on people with low incomes, who often need small amounts of money in more frequent transactions.

According to CA, these bankers typically live in rural and poor areas with round trips of over 10 miles to make, just to find a free cash machine.

Liverpool and Tintagel in Cornwall are two such notorious areas, where the closure of post offices, banks and non-charging machines ensures top rate fees for those needing to make withdrawals.

CA said the situation is even worse, because of advice from the Government that recommends several cash withdrawals instead of one lump extraction from a single cash point.

If consumers were to approach the Hanco machine, currently located in the Miranda club in London, for a £50 withdrawal they would face a charge of £10 – so a 20% levy.

However, a job seeker, resourceful enough to find a cash point charging £1.50, regardless of the amount being taken out, could lose almost 2.5 per cent of their weekly benefit of £55.65 - if he followed Government advice.

One artist in Boscastle, Tintagel said she is against paying any fees simply to access her own money.

"I refuse on principle to pay £1.50 to withdraw my own money," said Myrna Lester, who faces a 34-mile expedition to Wadebridge to use a free machine.

The Royal Bank of Scotland said the fee charged for its Hanco systems is governed by the shop or bar owner housing the machine, with a fixed price per transaction for the group.

The Bank has publicly stated that it does not charge customers to access their own cash, despite acquiring the Hanco group in June last year.

RBS bosses are now due to meet with the Treasury Select Committee to explain the high-rate charges.

It is understood RBS is expected to post record profits of £7.9 billion over the next month, representing a 26 per cent increase on the previous year.

Meanwhile, they have reacted to their critics, saying it does not "consider that Hanco machines are anything to do with what we offer our own customers as part of their banking service."

A RBS spokesman said: "In fact at only 7 machines, out of more than 6000 Hanco supplied machines in the UK, has a retailer decided to set a charge at more than two pounds."

 

31st January 2005

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