More Banks Are Imposing Extra Fees at ATMs
An increasing number of banks are imposing additional charges on customers who use automated teller machines, according to a study released Wednesday by a nonprofit consumer group.
In fact, the percentage of banks nationwide charging an additional ATM fee for someone who is not a customer of the bank has risen to 71% from 45% a year ago, according to the California Public Interest Research Group. CalPIRG, as the group is known, surveyed 470 banks in 28 states and the District of Columbia.
In California, 54% of banks, led by Wells Fargo & Co. and BankAmerica Corp., now impose additional fees for noncustomers, up from 44% a year ago, the survey found. Considering the market share of those two banks, an estimated 77% of all ATMs in California levy surcharges, the survey found.
Fees are on the upswing because two years ago, the nation’s two largest ATM networks, Plus and Cirrus, ended their ban on ATM owners charging noncustomers a surcharge on top of the fee most banks already charge their own customers for using another bank’s teller machine, CalPIRG said.
“What’s wrong with this surcharge is that it allows banks, particularly big banks, to raise the prices of their competitors and effectively makes it harder for consumers to bank at a small bank or credit union,” said Jon Golinger, consumer program director for CalPIRG. “That’s why Iowa and Connecticut prohibit this additional surcharge.”
In addition, the $1.40 average surcharge imposed in California is higher than the national average of $1.23, CalPIRG found. Last year the national average was $1.15.
Nationwide, the average cost of using an ATM including both fees is $2.41, CalPIRG found. For California, the average is $2.72.
While the average ATM surcharge in California is down slightly from the $1.45 levied a year ago, that’s because the additional banks charging fees in California are charging lower fees, bringing down the average, CalPIRG said.
“It’s [still] a lot more expensive to use your ATM in California,” said Angie Farleigh, consumer associate for CalPIRG. “We’ve had a great deal of takeovers here of smaller banks by larger ones, and the larger banks typically impose fees.”
Bank ATM surcharges are increasing even as the banking industry is enjoying its sixth straight year of record profits and amid a record number of bank mergers, the study noted.
John Stafford, spokesman for the California Bankers Assn., a trade group that represents 300 banks here, agreed that surcharges in California are higher than the national average and said that it’s possible more banks are charging what he called “convenience fees.”
But such fees, he said, make it easier for customers to get access to their cash.
“They are trying to make consumers out as victims in this, but consumers are greatly benefited by the increase in numbers of ATMs that the surcharges make possible,” he said.
The number of ATMs has grown 40% nationwide in the last two years, Stafford said.
“There’s never been a time when cash has been more easily available or more convenient for consumers to get,” he said.
According to the CalPIRG study, surcharge fees were highest in the South, where the dominant institutions, including NationsBank Corp. and First Union Corp., all impose surcharges.