6 Conclusions
141. The evidence we have received has shown that
there are significant issues arising from the current state of
the ATM market. Our inquiry has been timely. We have made a range
of recommendations about steps which need to be taken. The key
areas in which action is required from Government, regulators
and the industry are set out below.
- Growth of charging machines:
The number of charging cash machines has grown strongly in recent
years. While these may have increased consumer choice in some
areas, it is important they do not displace consumers' free access
to cash. All witnesses agreed that the number of charging machines
will grow further, though opinion differed as to how far the trend
would go. There would be important public policy concerns if,
away from existing branches, free access to cash withdrawals declines
as banks sell or close their existing network and the remaining
machines are concentrated in fewer locations. The Government needs
to keep developments under review.
- Transparency and clear signage:
To make an informed choice, consumers need a clear and prominent
indication of whether machines charge, and the amounts charged,
before they begin to use the machine. Improvements have been made
in the requirements set down by LINK, but more needs to be done.
In particular, LINK should set larger minimum font sizes for this
information so that it is clear. Advertising 'FREE balance enquiries'
can be deliberately misleading and should not be permitted.
- Regulation and the Banking Code: There
is a lack of openness about the way LINK rules are decided and
there is no comprehensive enforcement of the LINK rules on transparency.
Charging cash machines need to be brought within the Banking Code
so that the system of voluntary regulation is responsive to the
needs of consumers and is effectively enforced.
- Financial exclusion:
Cash machine charges may have a disproportionate impact on low-income
consumers. If free machines are withdrawn from areas without bank
branches then this may exacerbate existing financial exclusion.
- The role of the Post Office:
75% of cash machines in post offices charge a fee, and consumers
are paying over £10 million a year to use these machines.
A number of factors may have been involved (including the Direct
Payment programme). This runs counter to the Government's policy
goals of tackling financial exclusion and improving the quality
and efficiency of public services. There is a need for a fundamental
change of strategy: the current arrangements are not in the best
interests of sub-postmasters, benefit recipients or the local
community.
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