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ATM charges costing the poor

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19/07/2006

Poor people have no choice but to pay to withdraw their money, according to the charity, Citizens Advice.

Citizens Advice recently undertook research into cash machine charges, and found that the poorest people in society increasingly have no choice but to pay to use cash machines.

The report identified the existence of free ATM “deserts”, areas with no free ATMs – and it claimed these were often in deprived areas. The report said a prime example of a free ATM desert was Chapeltown in Leeds, identified by the Government as one of the most deprived areas in Britain, and which has ten fee-charging machines, but not one free cash machine.

The report claimed that fee-charging machines had a disproportionate impact on people on low incomes and those claiming benefits. It said that people claiming benefits now commonly had to pay to withdraw their money, and that the average cost for these withdrawals was £1.50.

David Harker, chief executive of Citizens Advice, said: “This is becoming a growing problem. People on low incomes need to take out small amounts of money and more frequently, but they should not be penalised as a result.

“Rural communities are amongst the worst affected, where people may have to travel miles to the nearest free cash machine or pay a high charge. We welcome responses from banks such as HSBC to look at placing new free machines in areas we think are free ATM deserts.”

To help tackle the problem, Citizens Advice called on banks and ATM operators to guarantee not to further reduce the number of free cash machines in deprived areas and to improve the signs warning people of fee-charging machines.

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