Free ATMS ‘should be legally protected’
Committee fears the rapid closure of cashpoints and bank branches will exclude the elderly and vulnerable
Free-to-use ATMS and bank branches should be legally preserved with a new watchdog set up to prevent closures that deny people access to cash, a committee of MPS has said. The Treasury committee expressed concern over the rate at which ATMS were closing – at least 300 a month – and the pace at which Britain was becoming a cashless society, threatening “stark” consequences for vulnerable people, including the elderly.
Free-to-use ATMS and bank branches should be legally preserved with a new watchdog set up to prevent closures that deny people access to cash, a committee of MPS has said.
The Treasury committee expressed concern over the rate at which ATMS were closing – at least 300 a month – and the pace at which Britain was becoming a cashless society, threatening “stark” consequences for vulnerable people, including the elderly.
It proposed a guarantee to ensure a right to access cash, potentially enforced by a legal duty of care on banks.
“A specified body should be tasked with operating this guarantee, and would be required to ‘step in’ in the event that cash services are not being adequately provided,” the MPS said.
The Bank of England should also bring together all the major banks to design a “wholesale cash infrastructure”, to meet the nation’s needs for cash for the next 10-15 years from 2020.
“If no action is taken, the UK risks inadvertently becoming a cashless society. For a large portion of society, including some of the most vulnerable, this would have stark consequences,” the MPS said.
In the first three months of this year, around 1,700 of the 52,000 free ATMS operated by Link were converted to pay-to-use terminals. At least 1,250 switched over in March alone.
The number of bank branches has fallen from more than 20,500 in 1988 to just 7,500, with almost one in five (19 per cent) of the population more than two miles away from a branch, according to Which?, the consumer charity.
Banks have defended the closures by pointing to the increasing use of online banking and contactless payment, but the committee warned that some vulnerable people risked being excluded. In cases where the last bank in town was about to shut, banks should pay for “banking hubs” in local post offices.
The MPS said there might need to be a new legal duty of care that would compel banks and financial services firms to always act in customers’ best interests, preventing them from ignoring the issue of “financial inclusion”.
Firms should also be made to publish the size of their “loyalty penalties” – the extra amount a customer often pays for services by failing to shop around. Citizens Advice has calculated that this can add up to nearly £1,000 per year.
Nicky Morgan, the committee chairman, said: “It can no longer be an option for banks to ignore financial inclusion. There are significant areas of concern where vulnerable consumers are effectively excluded.”
Figures from the Financial Conduct Authority show 1.3 million adults have no current or e-money account.