Friday, January 21, 2011

You think your ATM fees are high! Swan gets serious

Treasurer Wayne Swan has signaled a crackdown down on extortionate ATM fees in the bush setting up a joint Reserve Bank Treasury taskforce and giving it just one month to report.

The government has been told of one automatic teller machine in remote South Australia that charges $10 per withdrawal. Another, in the Torres Strait limits withdrawals to $100 at a time, at a cost of $5 each.

Even the standard $2 fee on checking bank balances can eat up as much as 20 per cent of as a Centrelink payment as recipients check repeatedly to see whether it has been paid into their account.

The Australian Financial Counselling and Credit Reform Association told the government in December that Indigenous Australians in remote communities made smaller and more frequent withdrawals than Australians in cities in order to avoid being "humbuged" or harassed for money by family members.

With no way of avoiding fees by going to an "own bank" ATM they paid far more than Australians in cities.

Mr Swan has asked the task force to report by February 28... on the provision, fees and impact of ATMs in remote communities and to suggest action to fix problems.

He has also asked for a second less-urgent report on the impact of the Reserve
Bank's rules governing the use of ATMs due by late June.

The rules prohibit ATM providers from charging banks for ATM transactions forcing them to bill their users directly.

Although designed to introduce competition into charging, the rules have standardised fees at around $2 per transaction in the cities.

The Reserve Bank has told the Senate banking inquiry the actual cost of an ATM withdrawal is around 74 cents, made up of 25 cents for obtaining the cash and around 50 cents for rent, equipment and processing the transaction.

Published in today's Age

ATM Fees in Remote Indigenous Communities

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