ATM Fees on the Rise for Non-Customers
The price bank customers pay to use another bank’s ATM has nearly tripled over the last five years, a new study says, although the rate of increase has slowed.
Nationwide, consumers who use an automated teller machine owned by a bank other than their own now pay an average of $2.86 per transaction, according to a study released Thursday by the U.S. Public Interest Research Group.
That’s up 11% from $2.57 two years ago and nearly triple the $1.01 charged in 1996, the year major ATM networks began allowing banks to charge additional fees--known as surcharges--to non-customers. Californians paid a penny more than the national average.
“Banks are still gouging consumers,” said Janine Benner, a consumer advocate with the California Public Interest Research Group, which is fighting banks’ efforts to overturn surcharge bans in Santa Monica and San Francisco. “The surcharge is unnecessary and unfair.”
Banks blasted the survey, saying it overstates the cost of using ATMs because most Americans use their own banks’ machines or find other ways to avoid or minimize the fees.
“Consumers are smart,” said Catherine Pulley, spokeswoman for the American Bankers Assn. “Sixty-eight percent of Americans pay $3 a month or less to use ATMs, and 57% pay nothing.”
The consumer group surveyed banks in 25 states, including 17 banks in Los Angeles, San Francisco and Sacramento. In California, the two largest banks--Bank of America and Wells Fargo--charged the highest fees, the consumer group said.
Both banks charge their own customers $2 to use another bank’s ATM, while charging non-customers a $1.50 surcharge.
The banks say the fees increase consumer convenience by helping fund the expansion of their ATM networks. Bank of America has 4,000 ATMs in the state while Wells Fargo has 2,700.
City councils in San Francisco and Santa Monica banned surcharges in 1999. Last year, a federal judge ruled the bans violated federal law and stopped the cities from enforcing them. The cities have appealed the ruling.
Although 94% of the banks surveyed now assess surcharges on non-customers who use their ATMs, a few have bucked the trend. Washington Mutual Bank said non-customer use of its ATMs has soared since the Seattle-based savings and loan dropped its surcharges in mid-October.
The thrift said the policy is an effective recruitment tool, with two-thirds of the new customers the bank surveyed citing the no-surcharge policy as a reason they switched banks, said spokesman Adrian Rodriguez.
The consumer survey noted another fee trend: About one-quarter of the large banks nationwide charge their customers an annual fee to use an ATM or check card, a practice that has yet to surface in California.
Wells Fargo, for example, charges a $15 annual fee for ATM card users in Iowa and a $10 fee in Colorado. Nationwide, the fee is charged by 24% of large banks and 12% of small banks, with the charge averaging $13.76, the consumer survey found.
Wells Fargo spokeswoman Mary Trigg said the bank had no plans to charge the annual ATM fee in California. The fees were instituted by banks in Iowa and Colorado before the bank’s 1998 merger with Norwest Corp., Trigg said.
Analysts say fees have helped boost bank profits and provided banks with some insulation against changing interest rates.
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Rising Costs
Fees for using ATMs at a bank other than your own have nearly tripled since 1996, although the rate of increase has slowed recently.
* Foreign fee: Charged by your bank for using another bank’s ATM
** Surcharge: Fee for using an ATM operated by a bank other than your own; charged by the bank that owns the ATM
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Source: U.S. Public Interest Research Group
