Cash machine rake-off soars

BRITS are paying a massive £140m a year to withdraw their money from cash machines ? more than double than in 2003.

In the 12 months to the end of September, nearly 100m withdrawals were made from fee-charging cash machines as the number of fee-based ATMs soared to nearly 20,000.

Nationwide said if the growth continues at its current rate of pace, the number of fee-paying machines will outnumber free cash points by next Christmas.

The company also claims 1600 free machines have a charging one within 100 metres, making a mockery of fee-charging machine operators' claims that they only select remote locations.

The report will make bank bosses and the ATM operators nervous ahead of the Treasury Select Committee's enquiry into charging cash machines.

Nationwide executive director said Stuart Bernau said: 'This is a defining moment as this could be the last Christmas where there are more free machines and than fee charging ones.

'We welcomes the Treasury Select Committee's enquiry and hope a code of practice can be devised which will make it easier for consumers to differentiate between charging and free machines.'

Critics of the cash points argue they should warn customers they will be charged before they begin the transaction.

Currently, most machines tell consumers they will be charged only once they have inserted their PIN and selected the amount they require.

Since 1999, banks and building societies have not charged customers for withdrawing money. However, smaller firms have spotted a niche by providing additional cash machines in 'convenient' locations. They typically charge £1.50.

Companies such as Moneybox and Cardpoint have been extending their network of machines this year by installing machines into offices and purchasing non-branch based cash points from banks, such as those at petrol stations.

Moneybox said yesterday it expects pre-tax profits to hit £3m in 2004 following a 15% rise in outlets to 2,830.

'We have made a detailed submission to the committee and are confident that we can demonstrate that independent ATM deployers provide choice and a service which is valued by consumers,' the company said.

'We have also pointed out that the transparency of our charges is in marked contrast to other card-based transactions.'