E-banking: Fighting for Non-Customer ATM Fees

BankBoston has met with some success in its campaign against a proposed Massachusetts ban on non-customer ATM fees. Sponsors of the ban under consideration in the state House of Representatives have modified it to allow for a $1 cap on fees rather than a total ban as long as banks adequately disclose such ATM charges.

Of the top 25 U.S. ATM providers, only BankBoston, Chase and Citibank do not have surcharge fees. But BankBoston intends to start charging fees this summer, claiming that its customers are subsidizing the growing non- customer use of its ATMs. To derail the proposed ban, the bank has pledged to pass on revenues from the fees to its own customers by reducing what they pay BankBoston for use of other banks' ATMs.

The bank calls it a free market issue, citing a PULSE network study that shows consumer behavior changes in response to ATM fees. The survey also found no appreciable loss of market share from small banks to large banks because of surcharging. The bank also notes that 15 states have passed laws allowing non-customer fees.

Consumer groups who support the proposed ban claim non-customer fees constitute "double-dipping" or charging customers twice for the same service-an argument that New York Republican Senator Alfonse D'Amato used to support legislation that he introduced to ban non-customer fees nationwide. FB