Consumers Still Being Stung by ATM Fees

KOMPAS.com - AUSTRALIAN consumers are spending more than $750 million a year on ATM fees despite attempts by the Reserve Bank to reform fee collections, a report claims.

The report calls for ATM owners to display the cost of transactions prominently on their machines. It also says fees should be abolished for balance inquiries and calls for more information to be given on the gap between the cost of providing ATMs and the revenue they can generate.

A survey of almost 1300 people by the Australia Institute and consumer advocate Choice, released today, shows that most Australians (82 per cent) believe it is unfair for banks to charge ATM fees. One in four reported paying a $2 fee for using an ATM not provided by their bank at least once in the week they were surveyed.

Australia Institute deputy director Josh Fear said despite reforms in 2009, competition had failed to bring down the cost of fees, with third-party ATM charges typically remaining at $2 or higher. 'The reforms have failed. One of the explicit objectives was to bring down prices, and they haven't bought down prices,' he said.

He said if a consumer checked their balance before withdrawing cash they could be charged a 'double-whammy' fee of $4. 'The government needs to force ATM providers to display the cost of transactions front and centre,' he said.

Ingrid Just, of Choice, said consumers would often put their cards into ATM machines and be reminded mid-transaction of a fee. 'We are saying that is too late because at that point you are already engaged in a transaction and you are unlikely to pull out and walk three blocks to try and find your own [bank's ATM].'

The report also called for fees for balance inquiries to be abolished. 'There is no economic case for keeping them in place,' Mr Fear said. 'If anything, it discourages responsible financial behaviour.'

But Steven Munchenberg, chief executive of the Australian Bankers' Association, said Reserve Bank reforms had changed consumer behaviour, encouraging consumers to use their own bank's machines.