Examination of Witnesses (Questions 140-159)
MR JOHN
HARDY AND
MR HOWARD
AIKEN
21 DECEMBER 2004
Q140 John Mann: Will charge you or may
charge?
Mr Hardy: Will charge.
John Mann: You said, "may charge".
Q141 Chairman: And "up to"—up
to what? Could you finish that?
Mr Hardy: Whatever the charge
is.
Q142 Chairman: So you do not even know
the precise charge.
Mr Aiken: Well, you cannot know
because the mechanism exists within LINK for the issuing bank
to actually contribute something towards that surcharge.
Chairman: But Mr Mann is asking you something
specific here.
Q143 John Mann: Well, how will it be
clear, the situation? Let's say I go back in June. We will give
the benefit of the doubt and we know it is rather a mess at the
moment and I will not be able to find out until a long way into
the transaction, so we come to June and I am in the same village
in Snowdonia that I do not know, or I will know it then of course,
but I will go somewhere else because I have visited Snowdonia,
so I am somewhere else in the wilds of England, let's say, I am
in the Lake District and I go into a village and I do not know
what the banks are or the machines and there are two or three
there. What exactly will happen? I will have to put my card into
the machine, will I?
Mr Aiken: No, the screen, before
you put your card into the machine, will say, "This machine
will charge you up to", whatever the value of the surcharge
is.
Q144 John Mann: Up to? Up to what?
Mr Aiken: Well, if the machine
levies a £1.50 charge, it will say, "up to £1.50".
Mr Hardy: Or if it levies a £1
charge, it will say, "up to £1". The reason for
that Howard was explaining earlier.
Q145 Chairman: But this is confusing
because you could have four machines which each say, "This
could charge you up to £2", but when you put your card
in each machine, you could maybe be charged 50 pence on the one
card, £1 on the other and £1.50. Would it not be better
just to put on the machine, "This machine charges X amount?"
Mr Hardy: No, because that would
actually reduce the transparency in a funny sort of way because
it then denies the card-issuer the ability to contribute to that
surcharge. We built that system precisely—
Q146 John Mann: So it is against my interests
to know?
Mr Hardy: No, it is not. What
we are saying is that it is very, very difficult to tell you the
exact amount. We built a system which was designed to be as transparent
as possible and to give the card-issuer—
Q147 Angela Eagle: But it is not transparent.
Mr Hardy: We built a system so
that the card-issuer could contribute towards subsidising the
surcharge if he wanted to do so.
Q148 John Mann: It seems to me that the
attempt is to give the maximum amount of information in the most
difficult way. Why not have a big sign stamped on the machine
which says, "A charging machine", and then I will not
even have to go and look at the screen, never mind put my card
in and I will be able to see, as I am in Snowdonia this week,
a big red sign which says, "Charging machine", and perhaps
a big green sign on another one which says, "Free machine",
and I then would make a rational decision.
Mr Hardy: But that is another
part of the rules that come in in June, that as well as all the
late message in the transaction, the early message which says
the amount of the surcharge, there will be a physical sign on
the machine and, incidentally, on any external signage that directs
the customers towards the machine, saying, "This machine
will charge you for LINK cash withdrawals".
Q149 John Mann: And how big will that
sign be?
Mr Hardy: Well, there are so many
different styles of ATMs that it is difficult to say.
Q150 Chairman: You have got us mixed
up actually because there is no clarity here. Let me give you
an example. I was going home to my constituency last week, thinking
about cash machine charges, and I was passing along the dual carriageway
and on the left-hand side of the dual carriageway there was a
garage with a sign saying, "LINK machine and Little Chef",
and on the right-hand side there was another one saying, "LINK
machine" and another restaurant, but the Esso garage on the
left-hand side for unleaded petrol was 80.9 pence and the BP garage
on the right-hand side was 82.9 pence, so a rational choice by
me would be to divert into the Esso garage and get 50 litres of
petrol at 2 pence a litre less. I cannot do that with charging
machines because I have got to go to them to understand. Why can
you not have them up loud and clear, like they have for petrol
stations? Why is it not as simple as that?
Mr Hardy: Because the charges
may vary. As I keep saying, we actually built a system so that
the card-issuer could, if they so desired, subsidise the surcharge.
Q151 Chairman: But you are not as fair
to the customer as petrol stations are, and that is the whole
point about this, that there is a lack of transparency here and
I think that is the point Mr Mann is pushing.
Mr Aiken: But once again from
June that sign which says, "LINK cash machine here"
will also say on it, "This machine will charge you".
Q152 John Mann: But it will not say how
much it will charge and we do not know how big the sign will be.
Is there a minimum and a maximum font size on the sign?
Mr Aiken: Yes, there is because
what we said on those signs is that it must be of a font size
that is commensurate with other wording on the sign and it cannot
be less than 14 point as a minimum.
Q153 John Mann: And you will be advertising
widely who is charging and who is not?
Mr Aiken: Well, the sign on the
ATM will say—
Q154 John Mann: In addition to the ATMs.
Mr Aiken: You mentioned the signage
outside which says, "LINK cash machine here" and that
sign itself from June must say, "This machine will charge"
if it applies.
Q155 John Mann: What is your estimate
in five years' time of the number, the percentage of the machines
compared to now which will be charging?
Mr Hardy: I would have said that
we probably will see about 50% of the machines will be surcharging
at that point in time.
Q156 John Mann: What is the percentage
now?
Mr Hardy: It is about 37-38%.
I think there is probably a relatively large amount of growth
left in the marketplace for machines which operate on a very low
number of transactions.
Q157 John Mann: I personally seem to
be in the minority because I disagree with the Consumers' Association
and the National Consumer Council, and my constituents agree with
me. My view is that there should not be charges for me to get
my money out of a machine. Do you not think that the British public
are of the view that they ought to be able to get hold of their
money for free, particularly considering the record profits of
the banks and financial institutions at the moment?
Mr Hardy: I think that is a question
to be addressed to the banks, not to the network. I am not supposed
to comment on retail charges.
Mr Aiken: One of the conditions
of our exemption is specifically that we must permit surcharging,
we must permit charging.
John Mann: Well, can I make a suggestion
because you know how we politicians like to keep in touch with
trends in society. I have noted that the machines in this building
are all currently free. Would it not be a good idea also to include
a charging machine here to give us a proper consumer choice? Perhaps
we can have the free machines in the House of Lords and the charging
machines in the Commons—
Mr Fallon: The other way round!
Q158 John Mann:— or vice versa,
and then we could make rational or irrational consumer decisions.
Mr Hardy: Would you like me to
convey your request for a charging machine to the independent
deployers?
John Mann: That would be very kind of
you because I think that might concentrate the minds of policy-makers.
Chairman: I say what it would do. It
would give us an understanding of the mindset of these independent
machine operators and see if it is worthwhile putting one in here.
That is the only reason for it.
Q159 John Mann: You see, I am all for
assisting your research, but what research are you carrying out
into the views of consumers or are you carrying any out into the
views of consumers on this slow trend in the market towards charging
them to take out their own money?
Mr Hardy: I do not think there
is a slow trend in the marketplace. I think there is a growth
in the number of surcharging machines fuelled by a willingness
on the part of a percentage of customers to pay for convenience.
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