Banks consider posting ATM fees

By CHRIS DANIELS consumer reporter

Australian banks will warn customers they are being charged a fee for using competitors' automatic teller machines, prompting calls for similar warnings here.

The move comes after an Australian parliamentary committee roundly criticised banks there for gouging money from customers each time they used other banks' ATMs.

Australian banks reacted immediately, the ANZ saying it would have warnings about fees on screen by May.

Westpac said last week it would put stickers on its cash machines warning of charges.

A survey in the US by the Bank of Boston found 25 per cent of customers sought their own bank's ATM when warned that a fee would be charged.

Banks here are watching developments in Australia, although they say much of the criticism does not apply to them because fees here are significantly lower.

The National Bank is the only major bank in New Zealand not owned by an Australian parent. TSB Bank is the only one owned domestically.

The Australian Government wants all electronic banking fees to be shown on cash and Eftpos machines.

It follows mounting controversy across the Tasman about the size of interchange fees, typically from $A1.50 ($1.85) to $A2 - far higher than those charged in New Zealand.

WestpacTrust and ANZ charge their New Zealand customers 50c every time they use a rival's machine.

WestpacTrust says it is looking at following the Australian idea of putting a sign on its machines saying who would be charged for using it.

Its competitors agree that each bank should be responsible for telling its own customers which ATMs they can use.

Consumers Institute chief executive David Russell said that while bank fees here were not as bad as in Australia, consumers were still angry about paying for services.

They had never been free, as banks previously received the money from higher mortgage rates or lower returns on investments.

He said that if a bank was accepting ATM transactions from rival customers, it had a responsibility to properly inform them about charges.

Banks should put signs on their ATMs advising customers when they would be charged a fee, said Mr Russell.

The days of ATM cooperation between New Zealand banks began to fade two years ago, when WestpacTrust, owner of the biggest ATM network, began charging a disloyalty fee.

Other banks named their version of the charge a "recovery fee."

Whatever they called it, the message was the same - use our money machine or pay.

Before August 1999, all banks shared the fees. At the end of the month, each bank would pay its rivals for each time a customer had used another machine.

WestpacTrust spokeswoman Jane Anderson said banks had charged each other between 50c and 80c when another bank's customer used one of their machines.

Competing banks, such as National, had been pulling out ATM machines while WestpacTrust had been installing more, she said.

The recent joining of forces of BNZ, National and ASB, and their introduction of fees, had been prompted by a drop in income because WestpacTrust customers were keeping to their own ATMs.

National Bank spokeswoman Cynthia Brophy said charging for the use of another bank's ATM was not a money-gathering exercise.

"We wanted WestpacTrust and ANZ to join us in saying 'let's drop this fee.' We were working on it for about a year and they declined to participate in it."