ATM firms deny profiteering

ATM firms deny profiteering

Four of the biggest operators of fee-charging cash machines denied exploiting customers and profiteering as they were grilled by MPs yesterday over their "aggressive" expansion strategies.

Three of the companies -Cardpoint, Bank Machine and Moneybox - were forced on to the defensive after it emerged that at a private meeting they had voted against industry proposals aimed at giving consumers clearer information about ATM charges.

Yesterday's Commons hearing came as Barclays attempted to seize some of the moral high ground last night, with the first screening of a new television advert promoting its cash machines, "making the point that they are free". The ad is being fronted by the football managers Sir Alex Ferguson and Sam Allardyce.

MPs have already warned that Britain's network of free-to-use cash machines could be in danger of disappearing altogether if the explosion in the number of ATMs that charge fees carries on unchecked.

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Five years ago, virtually all cash machines in Britain were free to use but the latest figures show that about 20,000 of the 54,000 ATMs - almost 40% of the network - charge a typical fee of £1.50 per withdrawal. In some cases, this charge rises to as much as £10.

Campaigners claim the problem has been exacerbated by high-street banks selling off some of their ATMs to independent operators. HBOS recently sold 816 of its machines to Cardpoint, and 250 of these have already converted to fee-charging ATMs, with more likely to go the same way. Meanwhile, Hanco, Britain's largest operator of fee-charging cash machines, was bought by Royal Bank of Scotland last year.

Amid growing concern, the Treasury select committee announced an inquiry into ATM charges. At yesterday's hearing MPs highlighted the need to make clearer information available to consumers, such as easy-to-read signs so people can tell from a distance which machines impose a charge and precisely how much they will have to pay.

James Plaskitt, Labour MP for Warwick and Leamington, produced a photo he took of a Cardpoint machine at the M40 services in Oxfordshire where the sign was at knee-level. "For three years you've been happy to warn people's knees," he told Mark Mills, the founder of Cardpoint.

The hearing was also told that Mr Mills picked up a £150,000 bonus in connection with the HBOS deal. Earlier yesterday, HBOS's chief executive, James Crosby, was questioned about the revelation that his bank lent Cardpoint some of the £50m it stumped up to buy the machines.

Mr Crosby said HBOS had "independently been bankers to that business for a substantial amount of time". He also told MPs that the proportion of fee-charging machines could reach 50% in the future.

The fee-charging operators said their businesses were based on consumer choice and that customers were happy to pay rather than not have a service at all.

Ron Delnevo, managing di rector of Bank Machine, said: "We only make small profits. We are not exploitative and we do not make super-profits."

Guardian Unlimited © Guardian Newspapers Limited 2005