Growing pressure to put signs on ATMs warning of the fee

PRESSURE is building for cash machine operators to display fees before a transaction commences, not once it is almost complete.

A woman uses a Westpac Banking Corp. automated teller machine (ATM) at Cuba Mall in downtown Wellington, New Zealand, on Wednesday, July 13, 2011. New Zealand's first quarter GDP, which includes the effects of the deadly February earthquake, will be released tomorrow after being delayed twice. Photographer: Mark Coote/Bloomberg

PRESSURE is building on the Reserve Bank of Australia to take its own advice and make ATM operators warn consumers of rising fees before a transaction begins.

Since 2011 the RBA — which oversees the ATM system — and Federal Treasury have considered it a good idea for charges to be disclosed in a sign on a cash machine or in a message displayed when a card is inserted.

At the moment the fee for using an ATM owned by an institution other than the card issuer’s is only revealed near the end of a transaction.

It is unclear why a change hasn’t been made already. Asked whether it could still happen, an RBA source said: “Absolutely”.

The case for change is gathering momentum after News Corp Australia revealed most of the cash-machine operators on an RBA watchlist have been increasing charges.

“We think consumers need to be informed of the cost of using an ATM before they use it, not on the screen after you’ve already typed in your pin and made your money request,” said Consumer Action Law Centre CEO Gerard Brody. “That way, they can determine whether it’s a good deal before they are committed to the transaction.”

The head of campaigns at consumer group Choice, Matt Levey, said: “It’s like deciding to pull into a service station — you want to read the price before you go out of your way and park at the bowser.

“If the aim is to drive down ATM fees through competition, you are not going to achieve that by burying fee information halfway through the transaction,” Mr Levey said.

Still, the Australian Bankers Association said moving the fee message to the start would slow a transaction down.

Against proposal ... Australian Bankers Association CEO Steven Munchenberg

“Five seconds (extra) will be enough to annoy people,” ABA CEO Steven Munchenberg said.

Putting a sign on an ATM wouldn’t work either: “The experience we’ve had is that stickers can be removed.”

And, speaking only of the charges for using a bank ATM that is not your own institution’s, Mr Munchenberg said: “Does anyone not know that it’s $2? I’d be surprised if there are people who are not aware.”

Non-bank ATMs, however, now tend to charge more than $2. The fee can be up to $4.

Research by Galaxy for ING finds so-called “foreign” ATM charges are the most hated finance fee. In a bid to attract new transaction account customers, ING executive director John Arnott yesterday said “we are turning every ATM into a free ATM”.

“We believe at ING Direct that the cost of withdrawing cash from ATMs should be borne by the bank not the customer, and that’s the direction we believe the banking industry should be heading,” Mr Arnott said.