Banks back down over plans for double cash machine charges

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High street banks and building societies bowed to pressure yesterday by agreeing not to levy two charges when someone uses a cash machine.

High street banks and building societies bowed to pressure yesterday by agreeing not to levy two charges when someone uses a cash machine.

The 34 members of Link, which operates 27,000 cash machines in Britain, said that from 1 July they would scrap the double charge that costs customers up to £2.50 to withdraw as little as £10.

But neither the disloyalty charge on customers using cash machines owned by a different bank nor the surcharge on non-customers has been abandoned.

From July people will still pay either a surcharge or a disloyalty charge when they withdraw money. At current levels, this costs up to £1.50 for every disloyalty fee and up to £1 for a surcharge.

John Hardy, chief executive of Link, said: "It was not a simple task to come to today's decision, but in the end we did it by compromise. We decided that the issuer [disloyalty] charge will be levied only when a surcharge is not."

Currently only the 200 machines located away from banks in garages and railway stations are allowed to levy surcharges, but from 1 January banks will be able to make this charge from any machine.

The Link banks, which include Lloyds TSB, Barclays, NatWest and Abbey National, will provide on-screen details about how much a customer is about to be charged and allow users to stop the transaction.

The Office of Fair Trading (OFT) reacted with caution to the news, saying banks should remember that Don Cruickshank said in his critical report last week that the cost of a cash machine transaction is between 30p and 60p.

A spokesperson for the OFT said: "This is part of what we have been asking for, as double charging is indefensible. But we will wait to see what level banks levy in surcharges."

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