Supplementary memorandum submitted by
LINK
Following the oral hearing on 21 December, the
Committee requested further information which is provided below.
1. Details of the new rules/Code of Conduct
LINK members have agreed in respect of transparency, due to come
into operation in July
At a meeting on 12 December 2004 the LINK Network
Members Council agreed that with effect from 1 July 2005, all
cash machines that charge will:
— Have an initial on-screen message
that shows the amount of the likely charge;
— Have external signage on the cash
machine itself that indicates that the machine will charge; and
— Any signs that advertise the presence
of the machine or indicate its location will also indicate that
the machine will charge.
Full details of the resolution passed are given
in Appendix I. (not printed)—see unprinted Ev p71)
This is in addition to the screen messages that advise
of the actual amount of the charge (once it is known) and require
the customer either to accept the charge or cancel the transaction.
2. Some indication of what opposition existed
to the proposals in relation to transparency (ie what the grounds
were for the opposition from one member and, if possible, the
identity of the member)
Proceedings at LINK Network Members Council
meetings are confidential (and LINK is bound by confidentiality
agreements with all its Members. However, there were two meetings
at which these issues were discussed:
— In August 2003, when the current
requirement for either an on-screen message or external signage
was agreed. At that meeting, only one Member voted against and
that was on the grounds that they did not want an on-screen message;
and
— On 14 December 2004 when the new
requirements were passed. On this occasion, five Members voted
against, presumably on the grounds that they thought that the
proposals were unnecessary and unduly onerous.
3. Indications of the range/types of cost
involved in (a) the installation of a machine and (b) the operation
of a machine
LINK examines the cost of operating Cash Machines
under the following headings:
— Depreciation of Purchase and Installation
costs.
— Site rental/Occupancy cost.
— Repairs and Maintenance.
— IT support of the Cash Machine (ie
central system cost).
— Cash purchase, delivery, management,
insurance and theft.
— Opportunity cost of the cash in the
Machine.
The typical cost of operating a Free Cash Machine
is £19,000 per annum at a branch, and £33,000 at other
locations. The typical annual cost of operation of an ATM installed
by an Independent Deployer is £9,500; however, the numbers
of transactions that occur at a Machine are at least as important
as the cost of operation in the determination of Interchange Fees
and Surcharges.
4. Clear explanation of the difficulties
in the way of the placing of clear notices on charging machines
of the level of charge which would apply to cash withdrawals (ie
indicating the various different circumstances in which the level
of charge might be uncertain in advance of the withdrawal request
being made).
Not all cards attract a charge from the Cash
Machine operator. A "no double charging" rule in LINK
means that if the card issuing bank is going to apply a charge
to their customer (eg in the case of a credit, store or charge
card) then the Cash Machine operator cannot levy a charge. Until
the customer's card has been read, and the Cash Machine operator
has passed the details to the card issuing bank and received confirmation
back, the cash machine operator cannot know whether or not the
issuer is going to apply a charge or the amount of the charge.
In addition, the LINK system provides the means for the card issuing
bank to pay all or part of the surcharge and, once again, the
Cash Machine operator cannot know whether or not this is the case,
until a response has been received from the issuing bank.
Finally, we understand that the Committee will
be asking for details of the location and availability of free
and charging Cash Machines in specific areas. We have not, as
yet received details of these areas but, as it was raised in the
oral hearing, we enclose (Appendix II) a map that shows the location
(and charging status) of Cash Machines in Speke. (not printed)
January 2005
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