ASIC will strengthen the code of conduct for electronic funds transfers / File

The Australian Securities & Investments Commission yesterday announced it would strengthen the code of conduct for electronic funds transfers as a financial counselling group blew the whistle on ATM fees as high as $10, The Australian reports.

Unavoidable ATM and EFTPOS fees can swallow a fifth of the welfare payments to indigenous customers, according to research by the Australian Financial Counselling and Credit Reform Association.

Start of sidebar. Skip to end of sidebar.

End of sidebar. Return to start of sidebar.

Find and compare

Save now

Home loans, savings accounts and more

It claimed that a privately owned ATM in the South Australian mining town of Mintabie charges $10 per transaction, while another remote store charges an EFTPOS fee of $5 for every $50 purchase.

"Unavoidable ATM fees are trapping indigenous consumers in a cycle of poverty," the association's executive director, Fiona Guthrie, said yesterday.

"While other Australians can avoid these fees by using their own bank's ATM or EFTPOS, there is typically only one ATM in a remote community and all of these charge fees."

The report says that many ATMs are owned by non-bank providers, including Customers ATM and the American-owned Cashcard ATMs, used in federal government-sponsored Outback Stores.

At the remote Seisia's general store on Queensland's Cape York yesterday, 21-year-old nurse Serah Nadredre said she spent $12 a week on fees she believes ought not to exist. "Over two weeks, that would pay for a $24 packet of nappies," she said.

Ms Nadredre said she withdrew money from the ATM about three times a week and used EFTPOS to pay for her other grocery purchases because she did not like carrying cash.

"If you check your balance and you don't have any money in the bank, it (the ATM) still charges you $2," she said.

Seisias Mayor Joseph Elu said most locals did not have computers or internet access so they could not check their bank balances online.

Indigenous Affairs Minister Jenny Macklin yesterday voiced her concern about the impact on people with low or fixed incomes, and said she was discussing possible action with Treasurer Wayne Swan. "I understand that for people who need to make small withdrawals on a regular basis it can put a lot of pressure on their cost of living," she said.

ASIC yesterday said it would ban stores hosting ATM machines from using customer cards and PINs as security for "booking up" purchases.

"While we note that book-up practices may be operated honestly and successfully in some communities, there is a high risk of abuse by merchants and this risk should be minimised," ASIC said.

But ASIC can only enforce its ban on signatories to the industry code - and the Australian-owned Customers ATM is not one of them.

A Customers spokeswoman said fees ranged from 75c to $2 for balance inquiries to $2 to $2.50 for withdrawals, "consistent with the cost of providing service to these locations".

The company shared the proceeds with the host store, she said.

Read more on this story at The Australian.