Letter from Shane O'Riordain, General
Manager, Group Communications, HBOS plc to the Chairman of the
Committee
ATM INQUIRY
I wanted to write with some information that
you may find helpful in your preparations for the Treasury Select
Committee hearing on ATMs on 1 February.
IMPROVING TRANSPARENCY
As we outlined in our December submission to
the Committee, HBOS recently sold 816 remote ATMs to Cardpoint.
Cardpoint is in the process of taking ownership of these ATMs
and a number of them will become surcharging.
We have listened carefully to the Committee's
concerns that insufficient notice is given to customers prior
to bank owned machines changing hands and their new owners surcharging
customers. I am pleased to confirm that, in response to your concerns
about the issue, we are placing notices (a copy is attached) on
the machines that we transfer to Cardpoint. The notices will alert
customers that cash withdrawals may no longer be free at that
machine.
The notices are clear and will be placed prominently
on machines, at eye level. From last week, all the ATMs that are
transferring to Cardpoint are being labelled; we are aiming to
give thirty days notice to customers.
TRANSFERRAL OF
HBOS ATMS TO
CARDPOINT
After recent media coverage, I thought it would
be useful to point out that the decision to surcharge is a matter
of negotiation between Cardpoint and the site owner. HBOS has
no involvement in this decision and has given site owners no incentive
to transfer to Cardpoint on a surcharging basis. For a number
of reasons, site owners may prefer to operate free to use machines
and this is why, as Cardpoint has confirmed to their shareholders,
charges will be levied on around 250 of the 816 ATMs we are transferring
to them.
As you will be aware, contracts for ATM sites
are usually between three and five years in length. More than
80% of the contracts relating to the machines we sold to Cardpoint
were due to expire next year, and there was no certainty that
we could have renewed them if we tried to do so.
FINANCIAL EXCLUSION
We have analysed the geographical spread of
our ATMs in response to your natural concerns that there may be
disproportionate numbers of charging ATMs in some of the poorer
parts of the UK Using the ODPM's index of deprivation, we can
confirm that HBOS operates over twice as many free ATMs in the
fifty most deprived areas compared to the least deprived.
With two-thirds of the market, HBOS is the largest
provider of basic, or social, banking products and has been for
some time. We open 25,000 accounts a month and our commitment
to providing these products to underprivileged sections of society
costs us £25 million pounds a year.
These products play a significant role in tackling
financial exclusion in the UK. Our Easycash and Cardcash accounts
give customers on low incomes access to money transmission services
and our ATM network.
I hope that you find this additional information
helpful. If you do have any queries please do not hesitate to
contact me.
25 January 2005
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