Examination of Witnesses (Questions 540-559)
MR PETER
MCNAMARA,
MR ASHLEY
DEAN, MR
RON DELNEVO
AND MR
MARK MILLS
1 FEBRUARY 2005
Q540 Chairman: No, I have never seen
"may". Quite frankly, I have not. Therefore, will you
go for a maximum or a minimum so that it tells people what they
are going to be charged? As I mentioned earlier, having to go
to 4 corners of a room if we had these machines there to find
out exactly what is the cheapest, that is not really transparent.
Mr McNamara, you have the reasonable voice and face here, tell
us?
Mr McNamara: You are broadly right.
I would agree with you that you can put a range in place, but,
it is quite true, there are some cards that operate free even
on surcharging machines.
Mr Delnevo: Mr McFall, you keep
making the point about people going round four ATMs. You have
never acknowledged the point that Mark Mills has made that the
vast majority of people using these machines use them week in
week out. The signage is a minor issue because they are aware
they are going to pay for it and they go back knowing it is convenient
to them. That is the beginning and the end of it.
Q541 Chairman: We are interested in the
public policy viewpoint, and if people approach your machines
and come away with big smiles, then I am delighted. The happier
the world is the better.
Mr Delnevo: But they are working,
so they do smile.
Q542 Chairman: Mr Dean, your submission
noted that having the amount of the surcharge on the screen and
displayed on marketing materials, such as window stickers, would
be problematic. As you say in your submission, "Any changes
to price would require expensive site visits and signage upgrades"?
Mr Dean: Yes.
Q543 Chairman: Could you tell us how
much a large sticker costs?
Mr Dean: The large sticker probably
does not cost very much, but the visit of a skilled trained engineer
to go and attach it does. They go when the machine breaks down.
The serious point behind this unenthusiasm for putting prices
all round everything, is that the effect that that will have will
sort of fix the price, and whatever it is, it will tend to stay
that way. We talked about some of the competition between independent
companies. What if I want to put one near one of Mark's HBOS arrangements
at £1.00, let us say? Surely that would be a good thing for
competition, and that is absolutely the way this company thinks.
Q544 Chairman: Let me try and go on and
ask that. How much would a site visit cost? Since you may either
visit the site on a regular basis to replenish the cash.
Mr Dean: I do not do that.
Q545 Chairman: Or if a replacement is
provided by the retailer you could send them the sticker or sign
in the post, so it does not seem to add up to much, Mr Dean?
Mr Dean: No, but then remember
we are looking at this in the context of LINK carrying out
enforcements, so it is not good enough, I do not think, to send
it in the post, is it? What if they do not attach it? Retailers
get piles of post saying "Attach this that and the other".
Q546 Chairman: Yes, but I think an important
message would be, here is the sticker, here is the sign. They
do it with petrol stations. If they have price changes they are
able to do that, and you get regular visits. It actually comes
over as disingenuous.
Mr Dean: It is absolutely not
meant to be that at all. In fact, I am a little disappointed you
see it that way, because I think we have been very enthusiastic
about supporting the charging. All I am trying to maintain is
a position where we can alter prices quite quickly. I just thought
as a basic principle in any market being able to alter prices
quickly is a good thing.
Q547 Chairman: Then again, the idea of
expensive visits and signage, I do not think that is an impediment
to letting people know exactly what they should be paying or roughly
what they should be paying?
Mr Delnevo: This is a low margin
business, Mr McFall. It is not a high margin business. That is
what you are missing here. Every time you put the cost up, you
put the cost up to the consumer as well because that has to be
passed on.
Q548 Chairman: You are going out to visit
these machines to replenish them. Mr McNamara, can you try and
explain for me what your colleagues are on about here?
Mr McNamara: The concern, of course,
and it is a genuine concern, is something that the labelling requirements
are consistently carried out by the retailer or the site owner.
To that extent we make sure the engineers check that signage is
in place for advice. There is no way of avoiding that requirement.
The ability to suddenly put in place new signs clearly does incur
a cost, because hopefully our machines do not need—
Q549 Chairman: You see, it could be perceived
that the answer that is given here is that the less information
the better for yourselves, the less information to the consumer.
Mr McNamara: I would stress, and
I think it is worth stressing because people can get too far carried
away with this, this is one of the most transparent charges that
there is, and clearly it will be, with the increased signage,
a very visible charge in terms of what you incur in banking. Other
charges associated with a card transaction are completely non-transparent.
Chairman: There you are.
Angela Eagle: We have been talking to
them about that.
Chairman: I think posting a sticker is
not too expensive a measure, Mr Dean.
Q550 Angela Eagle: Do you expect that
if you put these signs on and transparency will increase by July
that your usage will go down?
Mr McNamara: No.
Q551 Chairman: Could I move on to the
suggestion we had from Which?, which asked if there could
be some of sort of standardised labelling such as a large triangle
for a charging machine and a large circle containing the word
"free" for the free machines. Would you consider implementing
this suggestion in order to make it easier for informed choice?
Mr McNamara: I think it is not
necessarily the best answer. I think very clearly everybody understands
that broadly speaking building society and bank machines so branded
are nearly always free. Any machine that is not so branded, clearly
there is a warning on it of some type of charge that may be levied.
Where it could be limiting, and I would stress it could be limiting,
is that certain cards that do operate are free, even on charging
machines, as has been alluded to, and there is every potential
that in future deals and transactions that enable cards to operate
free at our machines will come about. There is no reason, for
example, that the banks or other card issuers have to pass on
the surcharge. That surcharge travels in a quite separate field
technically speaking, and the amount of that surcharge that is
passed on to the customer is entirely discretionary to the card
issuer.
Q552 Chairman: The concept of labelling
machines free of charging; is that not a reasonable idea?
Mr McNamara: Yes.
Q553 Chairman: It is something we could
work on?
Mr McNamara: Yes.
Mr Mills: We made our machines
bright orange from the beginning to differentiate ourselves from
the bank and then have asked every single customer to accept the
charges. To put a red cross or a green tick on, I do not know
whether it would add anything, but we are happy with the principle,
but by the same token you have to look at the—
Q554 Chairman: Are you happy with the
principle, Mr Dean?
Mr Dean: Yes, of course, and voted
for it.
Q555 Chairman: Mr Delnevo, are you happy
with the principle?
Mr Delnevo: The principle of having
improved signage we are always happy to look at. The fact is that
no ATM is truly free in this country, so it is very dangerous
to suggest you could put "free" on any ATM.
Q556 Chairman: So you are against putting
"free" or "non-charging" on?
Mr Delnevo: I am against putting
free on any ATM because you get charged for credit card transactions
at ATMs and there are a host of other things that you get charged
for. It is not as simple as free or not free, unfortunately.
Q557 Chairman: That is fine. That is
a very clear answer. Voluntary regulation is only effective if there
are effective monitoring enforcement procedures in place. Can
you guarantee that all your cash machines are complying with the
existing Code of Practice?
Mr McNamara: We checked them regularly
with our engineers to make sure that they do comply, and it is
our intention to carry on doing that.
Q558 Chairman: They do comply?
Mr McNamara: As far as we are
aware, they all comply.
Mr Mills: We check them regularly,
but, unfortunately, if someone were to peel one of the stickers
off then you are left in a fairly invidious position; so to mitigate
that we are putting it on the screen. They all comply, as our
engineers leave the premises, and they will all comply when it
is on the screens.
Mr Dean: Yes, subject to them
being checked whenever we arrive.
Mr Delnevo: The same answer.
Q559 Chairman: If the rules were changed
to enable convenience cash machine operators to join, would your
companies be willing formally to sign up to the relevant provisions
of the Banking Code and be subject to the procedures of monitoring
and enforcement?
Mr Mills: Given that that would
give us less stringent regulation—
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