Friday, May 25, 2012

Incredibly good news - action on remote Indigenous ATM ripoffs

From Swan today:


The Gillard Government today announces a new commitment by the Australian banking industry and two major independent ATM companies to voluntarily provide free transactions at 76 ATMs across very remote Indigenous communities in the Northern Territory, Queensland, Western Australia and South Australia.

In very remote Indigenous communities, people often have no alternative but to pay frequent ATM fees because they cannot access the type of ordinary banking services which most other Australians take for granted. Indigenous people and residents living in very remote communities often rely on a single ATM located in a community store owned by an independent ATM company to access their cash and check their account balance.

This important initiative follows the recommendations from a joint Treasury/Reserve Bank of Australia Taskforce (‘Taskforce’) that looked into issues relating to expenditure on ATM fees and the cost of ATM access in very remote Indigenous communities. The Taskforce has worked closely with the banking industry and the two independent ATM companies on this initiative.

Under the initiative, thirteen banks - ANZ, Bankwest, Bendigo and Adelaide Bank, BOQ, Citibank, Commonwealth Bank, HSBC, ING DIRECT, ME Bank, nab, St.George, Suncorp and Westpac - will work to implement a proposed arrangement to provide their customers in identified very remote Indigenous communities with access to fee-free ATM transactions.

It has taken him a while.

He gave the taskforce one month to report back in January 2011.

But maybe the time he has taken has been worthwhile. He has got the ATM companies to agree not to rip off remote Indigenous communities.

No need for legislation.

Here's what I wrote when he set up the taskforce in january 2011:

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 the Age

ATM Fees in Remote Indigenous Communities

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