Half of cash machines to charge, MPs are told

Cash machine operators reject idea of a cap on charges w Crosby says HBOS committed to free ATMs

ONE IN two UK cash machines will soon charge customers to withdraw money, James Crosby, the chief executive of HBOS, predicted yesterday.

Speaking at the second hearing of the Treasury Select Committee's investigation into cash machine charges, Mr Crosby, the head of Britain's fifth-largest banking group, conceded the growth in fee-charging machines was likely to continue to outstrip the much slower growth in free ATMs. This meant the proportion of those charging would soon rise from 40 per cent to 50 per cent or more, he said.

However, Mr Crosby added that even if the proportion of fee-charging ATMs exceeds 50 per cent, these machines are unlikely to account for more than 5 per cent of all cash machine transactions. Such machines represent only 3.6 per cent of all transactions. He said HBOS remained committed to providing free-to-use cash machines, despite its sale of 814 terminals to Cardpoint, a private operator, last year.

However, MPs criticised Mr Crosby for the sale of the 814 machines, highlighting that 250 had already been transformed into fee-charging terminals, with many of the rest likely to follow suit. They said HBOS had cashed in doubly, by lending the money to Cardpoint for the deal.

Mark Mills, Cardpoint's chief executive, who faced the committee along with managing directors of three other private ATM operators, admitted he hoped to convert more of the HBOS machines to a fee-based structure, saying "that was the point of the deal".

In response to MPs' criticism that customers did not want to pay for cash withdrawals, Mr Mills said: "Every customer would like everything for free, but the world isn't like that. But when our service is charged for, people are quite happy to pay a fee rather than not having the service at all."

Although the private operators rejected calls for a cap on ATM charges, Mr Crosby said he was not opposed to a cap "in principle". However, he said it would probably not be legal.

Benny Higgins, the head of retail banking for Royal Bank of Scotland, said he did not think a cap was necessary, while all four private operators said none of their machines charged more than pounds 2 for a withdrawal.

John McFall, the chairman of the Treasury Select Committee, called on the industry to use clearer warnings on machines that charge. He said he would look into what customers at RBS - which owns a fee-charging ATM operator called Hanco - wanted, to which Mr McFall retorted: "I'm a long standing RBS customer, and I'm telling you I want you to put bigger warnings on your machines that charge."

Mr McFall added he was concerned that customers in deprived areas were the worst affected by the dilution of free ATMs, with many having no free cash machines within miles. Mr Higgins said RBS had more machines in deprived areas than inn wealthier districts.

The private operators continued to resist calls for the mandatory introduction of large price warnings on the outside of charging machines, warning this would make it harder to change prices quickly. They added that charges are not the same for every customer.

The inquiry ends next week when Nationwide, the Post Office and Stephen Timms, the Financial Secretary to the Treasury, are questioned.

There is suspicion that traditional banks are happy for ATM charging to come in gradually so that ultimately they will be able to charge. But Mr Crosby said he was committed to free ATMs.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'