STRATEGIC PARTNERS
February 27, 2002
LONDON -- British banks agreed yesterday to allow surcharging, according to the Daily Telegraph.
The move by members of the national Link network may face opposition from the Office of Fair Trading and Don Cruickshank, who is reviewing banking competition for the government.
In earlier published reports, Cruickshank indicated that he will recommend a maximum charge of 30 pence a transaction.
The U.K.'s banks and building societies have been at odds over surcharging since Barclays announced plans to implement a £1 convenience fee last summer. Some building societies, most prominently Nationwide, even threatened legal action, warning that such fees were against Link rules.
But other banks agreed to support Barclays at yesterday's Link meeting. Beginning Jan. 1, 2001, banks may opt to begin surcharging non-customers at the ATM. There is no cap on the charges which can be imposed, although they must be disclosed at the machine.
Brian Davis, CEO of the Nationwide Building Society, called it a "sad day" for bank customers.
"We're disappointed in the result. The silver lining is that the display on screen will allow customers to abort transactions," said Jeremy del Strother, communications director for Nationwide. "If we see any bank which we believe is overcharging we will refer it to the competition authorities. For the foreseeable future we will refund any surcharge that our customers face."
Link, which has 34 members, including all banks and most building societies, was set up in 1986. When big banks like Barclays joined last summer, it was heralded as a breakthrough for customers who would be able to use a larger number of machines free of charge.
Members pay each other interchange fees. Just as in the U.S., some banks absorbed those costs while others recoup the money by charging their customers "disloyalty" fees every time they use a machine owned by another financial institution.
