ATM fee reforms a failure 05 March 2010 6:43am The Reserve Bank of Australia reforms of fees on automatic teller machines have been a failure, according to a leading consumer financial comparison website.
Despite the fact that 60 per cent of ATM withdrawals are made without a direct charge at an ATM owned or associated with their own financial institution, many people are paying a lot more in ATM fees than they were before the March 2009 reforms, analysis by Mozo.com.au concludes.
And the big four banks have been the main beneficiaries, while customers of smaller institutions have been made to pay more.
One of the three main aims of the RBA reforms was to promote greater competition on fees between ATM owners according to the RBAs 2009 Payments System Board Annual Report.
However most ATM deployers settled immediately on a $2 direct charge for transactions by customers of other banks and have not changed their fees since March 2008.
In an analysis of 37 different transaction accounts from 22 different banks, building societies and credit unions, Mozo found 15 accounts where an average customer now pays more transaction costs than a year ago, 17 accounts where there's been no change, and only five accounts where the average customer is paying less.
The five accounts where the average customer is now paying less in ATM fees compared to one year ago were some fairly expensive transaction accounts from Bendigo, HSBC, mecu, IMB, and Savings & Loans.
Accounts from the big four banks were all placed in the middle group of seventeen, where Mozo found there was little or no change in fees paid since the reforms came into effect in March 2009.
Most affected by the change in ATM fees are people with everyday transaction accounts from smaller institutions which used to allow free transactions at other banks ATMs, including customers of CUA, AMP Bank, BankWest, Newcastle Permanent, Community CPS, MyState, Rural Bank and Citibank.
The latest data from the RBA, from December 2009, indicates that 60 per cent of ATM transactions are now made at an ATM owned by the customers own bank, up from 56 per cent one year ago. Article By: Jason Bryce
CUS Price at posting:
$1.90 Sentiment: None Disclosure: Not Held
