SURCHARGING ATMs TO
OUTNUMBER FREE-TO-USE MACHINES
ACCORDING to shock new findings from Sainsbury’s Bank, by October
2007 there could be more fee-charging cash machines in the UK than
free-to-use ones. This is based on the fact that the number of
surcharging cash machines is growing more rapidly than the number of
free-to-use ATMs. Between June 2004 and June 2005, around 286
surcharging ATMs were installed every month as opposed to 53
free-to-use ones. If this rate continues, the researchers estimate
that by October 2007 the number of surcharging ATMs could increase
to 33,821 compared to just 33,718 free ones.
Given the dramatic increase in the number of surcharging ATMs,
Sainsbury’s Bank warns that during 2006, consumers could make around
110 million withdrawals from these machines and pay well over £140
million in charges for doing so.
Tim Pile, Chief Executive, Sainsbury’s Bank said:- “We are
deeply concerned about the dramatic increase in the number of
surcharging ATMs and the very real threat that they will soon
outnumber the free-to-use machines. We believe that it is
fundamentally unfair to make consumers pay for using an ATM to
access their own money, and we urge all consumers to make sure they
know whether or not the ATM they plan to use charges for making
withdrawals."
Sainsbury’s Bank does not apply surcharges for people using any of
its cash machines and over the past 2 years has increased its number
of ATMs by 129%, with plans in place to add many more. These
machines are conveniently located at Sainsbury’s supermarkets,
Sainsbury’s petrol forecourts and at hundreds of local convenience
stores throughout the country.
There are currently around 23,931 ATMs in the UK that apply
surcharges for withdrawing money, compared to 32,355 that are free
to use. A typical charge is £1.25 but some machines charge as much
as £5.00 per withdrawal.
From July last year, any ATMs that apply a charge must clearly
display this on the screen and consumers must confirm that they
accept this before completing their transaction. The new rules have
been introduced by Link who are using NOP, the market research
group, to conduct regular spot checks to ensure providers are
complying with these rules, a development Sainsbury’s Bank strongly
supports.
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5
MILLION CREDIT CARD HOLDERS HIT WITH PENALTY FEES LAST YEAR
ALMOST 5 million UK
credit card holders paid a penalty fee on their plastic in 2005,
according to new research. The report, commissioned by MoneyExpert.com and Defaqto, found more than 10% of the population
racked up charges for items such as late payments and exceeding
credit limits. It also found as many as 1 in 5 cardholders do not
understand fully how a credit card actually works.
The Office of Fair Trading is currently investigating the level of
charges levied by card firms with the aim of forcing them to cut
fees. It has already written to 8 providers ruling that their late
payment charges are “excessive”.
MoneyExpert.com partnered with
financial information and research company Defaqo to commission the
research which highlights the stark need for better financial
education. The organisations warned that uninformed consumers
are unnecessarily vulnerable. As many as 4.5 million people intend
to switch credit cards early this year and the firms say some could
be ‘buying blind’ because they do not understand which
product is best for them. They have teamed up to launch a free
independent guide on credit cards to help confused customers get a
better grip on their finances. The guide is available at
www.moneyexpert.com.
Sean Gardner, MoneyExpert.com’s Chief Executive, said:- “A
single late credit card payment can cost as much as £35 so it is
worth handling your finances well. It is worrying that so many
people do not feel adequately informed about their credit cards. The
current market puts such an emphasis on interest rate that people
may have lost sight of the complexities of some financial products.
You shouldn’t even consider taking out a financial product if you
don’t feel you fully understand what you are buying. Our
guides are designed to be user-friendly and aim to tackle this issue
head-on. There is clearly a need for better financial education in
the UK and we hope people will take the opportunity to research the
credit card market before committing to anything.”
The research study interviewed adults aged 18 and over and found
that some 11%, that's 4.99 million people, have had to pay a penalty fee
on their credit card in the past 12 months. Around 21%, that is 9.8 million
people, regard paying off their credit card as one of their biggest
financial challenges this year, suggesting many cardholders are keen
to avoid penalty charges in 2006.
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