ATM fees hit indigenous communities hardest
A financial counselling organisation is calling for ATM fees to be scrapped in remote Indigenous communities after it was reported that some Aboriginal people were spending up to 20 percent of their incomes on ATM fees.
Financial Counselling Australia said "foreign ATM" fees can be as high as $10 for each transaction in some remote communities. "Foreign ATM" fees are the fees charged by ATM operators when you use an ATM outside of your financial institution's network and currently average $2 per transaction.
To combat the fees consumer watchdog Australian Securities and Investments Commission (ASIC) and insurance company TIO have created talking posters that will be displayed in 40 remote stores throughout the Northern Territory. The posters warn about the costs of excessive ATM use.
But Fiona Guthrie from Financial Counselling Australia says it's not enough and that fees to use ATMs in remote areas should be abolished.
"We have just got to get off our hands and do something," she said.
"If you live in a remote community, the ATM is almost certainly provided by a private operator. That means every time you use an ATM it is what you call a "foreign transaction", so you get charged a fee to withdraw cash and you get charged a fee to check your account balance.
"If you've got no choice, and you're being exploited by excessive fees, ultimately we've got to do something about not having those fees charged in the first place. That is the only solution."
While residents of some remote communities are suffering, fee revenue from foreign ATM use in broader Australia has declined in recent years, according to RateCity research.
The decline is largely due to the introduction of direct charging in March 2009, which made ATM pricing more transparent and flexible. Consumer behaviour has largely shifted; Australians are relying less heavily on other banks' ATM networks and more heavily on EFTPOS cash withdrawals, Reserve Bank data shows.
Nevertheless, Australians wasted around $660 million accessing their own money at the ATM last year, according to RateCity research. An estimated $54.5 million was spent on "foreign" ATM fees in February 2012 alone. Around 40 percent of all ATM transactions made were "foreign ATMs", with one-in-three dollars withdrawn from machines outside a customer's bank network.
How to reduce the bill
- Budget your monthly spend and withdraw money accordingly – avoid multiple trips to the ATM
- Make the most of digital and mobile banking technology – iPhone and android apps can help to locate your network's ATMs and transact online among other tools
- Be aware that fee-free transactions accounts may still charge foreign ATM fees because "direct charges" are imposed by the bank servicing the machine rather than the customer's bank
- Switch and save – compare transaction accounts online for one that best suits your circumstances.
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