Five
years after ATM owners began imposing ATM surcharges on non-customers,
a new national survey finds that the cost of using another bank’s ATM
machine has nearly tripled, from $1.01 before surcharging to $2.86
today. The new CoPIRG survey finds that while in 1996 consumers paid
only a single “foreign” ATM fee to their own bank, averaging $1.01, to
use another bank’s ATM, they now pay both that foreign fee plus the new
surcharge that, combined, average $2.86 in 2001. The survey also found
that the nation’s biggest banks charge the highest combined ATM
transaction fees and are leading the way in charging a new annual ATM
card “rental” fee.
“Double-dipping
ATM surcharges now mean triple costs for consumers, ” said Emily
Hoopes, consumer advocate for CoPIRG. "Charging consumers twice to use
the ATM only once is worse than an April Fool’s joke, it’s part of a
calculated bank strategy to boost profits: Raise fees, invent new fees,
and make it harder for consumers to avoid fees."
On
April 1, 1996, the two largest ATM networks, VISA's Plus and
Mastercard's Cirrus, ended their prohibition against member banks
surcharging non-customers using their ATMs. The ATM owner keeps the
entire surcharge and receives a portion of the "foreign" ATM fee nearly
all banks had previously and continue to charge their own
accountholders who use other owner’s ATMs.
“In
addition to charging the biggest ATM surcharges and the biggest foreign
fees, big banks are leading the way in charging a new annual ATM card
rental fee, too,” added Hoopes. “We will continue to support efforts by
states and cities to ban ATM surcharges, so that consumers can get some
relief from these unfair fees.”
The
report is the fifth state PIRG surcharge survey since April 1996. It
compares ATM surcharges and other ATM fees at 376 banks and credit
unions in 25 states and the District of Columbia. Among the key
findings of “Double ATM Fees, Triple Trouble” are the following:
n
Locally, banks charged a combined ATM fee averaging $2.76, compared to
the national combined ATM fee average of $2.86. Surcharges averaged
$1.38 in Colorado, and foreign fees averaged $1.39
n The highest surcharges in Colorado were at Key Bank which charges $2.00
n The highest combined ATM surcharges and foreign fees were charged by Wells Fargo which totaled $3.50.
n
Two Banks in Colorado charge annual ATM card fees in additional to
double surcharges at the ATM; FirstBank ($7.50), and Vectra Bank
($10.00).
n
Five Colorado Banks charge an annual fee for Check Card in addition to
double surcharges at the ATM, ranging from $10.00-$15.00 at Vectra Bank.
n Nationally, 94% of all banks surveyed imposed surcharges averaging $1.47. Average foreign fees were $1.39.
n
Nationally, big banks had higher ATM fees in 2001 than locally-owned
smaller banks and more big banks surcharged. Combined big bank ATM fees
averaged $3.07. Nationally, 97% of big banks charged surcharges
averaging $1.55. Big bank foreign fees averaged $1.52.
The
report also documented that some banks are now charging consumers an
annual ATM card fee. Eighteen percent of all banks imposed annual card
rental fees averaging $13.76 on either ATM card or ATM debit card
holders or both. Twice as many big banks (24%) as small banks (12%)
imposed the annual card rental fee. “Charging us twice to use the ATM
only once isn’t enough,” added Hoopes, “Now the banks want to rent us
our ATM cards as well.”
Despite
the increase in the number of ATMs surcharging, some positive signs
exist. Several cities, led by San Francisco and Santa Monica, have
banned ATM surcharging, although those bans have been blocked pending
an ongoing appeal. Iowa continues to enforce its ban on surcharging.
Other cities, including New York and Chicago, are considering bans, but
until the California appeal has been decided, the banks’ lawsuits will
continue to have a chilling effect on surcharge ban efforts, Hoopes
noted.
In
addition, several networks and alliances of small banks and credit
unions are aggressively marketing their own "no-surcharge" and
“selective surcharge” policies. A primary example is CO-OP Network.
Based in California and owned by member credit unions, the Network is
the nation's largest network of credit union ATMs and retail point-of
sale terminals. Nearly 9 million CO-OP Network credit union members
enjoy surcharge-free access to their money at more than 705 CO-OP
Network credit unions and 4,273 surcharge-free ATMs across the U.S.
Network credit union members can make deposits, cash withdrawals and
transfers without incurring a charge by the owner of the CO-OP Network
ATM. CO-OP Network has approximately 239 ATMs in Colorado, and 82 of
the ATMs do not surcharge at all.
"Although
there are other small selective-surcharging arrangements around the
country, CO-OP Network provides unparalleled access for 9 million
credit union members to its surcharge-free ATMs in 44 states", says
CO-OP Network CEO and President, Robert Rose. "In other words, the
credit unions in CO-OP Network do not surcharge each other’s members".
"Until
the U.S. Department of Justice intervened in 1999, development of these
selective surcharge networks had been blocked by unfair membership
rules of ATM networks, Emily Hoopes noted.
“Despite
the recent growth of the No-Surcharge and Selective Surcharge
Alliances, CoPIRG will continue to support local and statewide efforts
to ban ATM surcharges,” added Emily Hoopes. “Surcharges are unfair and
lead to the growth of bigger banks, which even the Federal Reserve has
documented charge the highest fees.” Hoopes noted that California PIRG
had led efforts to ban surcharges in Santa Monica and San Francisco and
is actively supporting the cities’ appeal to the U.S. 9th Circuit Court
of Appeals, which will be decided later this year.
"We
urge consumers to avoid surcharging, fee-gouging ATMs," Emily Hoopes
said. " Use your own ATM when possible, otherwise use ATMs with "No
Surcharge Alliance" signs. Shop around when choosing a bank. Bank at a
credit union not a bank". Emily Hoopes concluded. "Consumers should
contact their local, state and federal legislators and urge them to
fight the ATM surcharge rip- off."
