MPs target cash machines that charge £10 a time

Cash machines that charge customers up to £10 to withdraw their money will be criticised by an influential committee of MPs next week for not being transparent about costs.

Cash machines that charge customers up to £10 to withdraw their money will be criticised by an influential committee of MPs next week for not being transparent about costs.

The Treasury select committee will say that all charges must be flagged up before a card is put in.

They will also criticise the Post Office for providing fee-charging machines in more than 75 per cent of branches.

Around 40 per cent of all cash machines charge. They are installed at a rate of 10 a day and James Crosby, head of HBOS, Britain's fifth largest bank, has warned that more than half will soon charge.

The average fee is £1.50, but some cost £10 per transaction.

In 1999 all cash machines were free. Last year £140m was paid out to use 22,000 cash machines.

It has had a major impact on people on low incomes who need to take out small amounts of money in frequent transactions. They tend to live in deprived areas that have already been affected by bank closures. It also hits those on state benefits that are paid through bank or post office accounts.

Companies operating fee-charging ATMs will be given until the end of the year to act on the committee's recommendations. If they don't, it is likely to suggest that the Government introduces tough regulations.

The report will criticise Link, which is supposed to co-ordinate the network, for not doing enough to tackle the problems. It will suggest ATM companies should be brought into the Banking Code.

The report will also pour scorn on the industry's claims that more people now have access to free machines. While the number has increased gradually, they tend to be concentratedrather than spread across a wide area.

It has been estimated some families on benefits see as much as 7.5 per cent of their income swallowed up by charges.

The committee will not call for fee-charging machines to be scrapped, nor will it make a case for the capping of fees. It is likely to say that where they are installed in areas without free cash machines, they are providing a service.