If you're my age or older, you probably remember the good ol' days when you could use an ATM without
paying a fee. Things started changing in the mid-1990s and I expressed my outrage in one of my columns.
Withdrawing money from the bank used to be so convenient. You could visit a money machine almost anywhere. Without paying a cent, you could get enough cash to buy a television or put a large down payment on some basketball shoes.
But a couple of years ago some banks started charging a fee. If you didn't have an account with them, you had to pay at least a dollar to withdraw money at their ATM (Automated Theft Machine).
Other banks followed suit and now the majority charge a fee. Some even charge as much as $3, more than most of us save in a year. That's a steep fee, especially when you're trying to withdraw $5.
To their credit, banks have tried to make ATMs much safer for us. They've installed bright lights and security cameras. They don't want anyone else robbing us. [Link]
A decade later, the robbery continues unabated.
Chase, which leads the Chicago market in the number of branches and automated teller machines, has hiked the fee it charges non-customers to use most cash dispensers nationally to $3, one of the highest surcharges in the industry.
Previously in Chicago, Chase charged $2. In other markets, Chase might have charged non-customers as little as $1.50.
The increase was effective Jan. 13.
"The extensive Chase ATM network is a convenience we provide our customers," Chase spokeswoman Christine Holevas explained. "Non Chase customers pay a fee for that convenience." [Link]
Well, you can charge 50 cents for the convenience, but anything more is robbery, plain and simple. Sure, the people who withdraw money are agreeing to be robbed, but sometimes they don't have a choice. It's not like there are a dozen ATMs in every mall or grocery store. Usually one bank has a monopoly and if you don't have an account there, the only thing you can do is hand your wallet to the masked gunman.
The $3 surcharge puts Chase in the upper echelon of non-customer fees.
The average surcharge -- the fee that ATM owners charge nonaccount holders to use their machines -- established a new high in Bankrate.com's fourth consective survey, released Sept. 26, jumping from $1.64 to $1.78.
Forty-three institutions raised their surcharges in the latest survey, while only three reduced them.
The most common fee is $2, but 22 banks in the survey charged more than that.
Bank of America, the nation's second-biggest bank last summer boosted surcharges for non-customers withdrawing cash at most of its ATMs nationwide, to $3 from $2. [Link]
Those poor banks, they're forced to raise fees because their costs are too high, not just the cost of installing and maintaining an ATM, but also the cost of the CEO's private jet.
Bank of America Corp.’s chief executive, Kenneth Lewis, posted a $91.58 million gain from the exercise of options and vesting of stock awards in 2006, in addition to a obtaining a $22.85 million compensation package.
The number two US bank’s profit rose 28 percent last year, a record.
Lewis realized $77.04 million from the exercise of 4.08 million stock options and had $14.54 million of stock awards vest, according to the bank’s proxy filing.
These awards were in addition to a compensation package comprising a $1.5 million salary, $14.63 million of stock and option awards, $6.5 million of incentive awards, and $219,969 of other compensation, including the use of a corporate aircraft, tax and financial planning, and security provisions. [Link]
Hmmm ... perhaps I shouldn't have complained about paying $3 at the ATM. I didn't realize it went to such a good cause.
Photo by Clockwerx
"Its cheaper to put a person behind it" - Well if it is, then they'll figure a way to outsource it to India. That should help drop the costs.
BTW the average cost of ATM annual (machine+ electricity + phone line) is less than 20,000, add a person to keep it filled with $20 bills it goes up. The "inflated" bank costs is $80K.
Posted by: Mukund Mohan | January 16, 2008 at 07:20 PM