Consumers Seeing Red over Wave of ATM Surcharges

By Keenan, Charles | American Banker, December 26, 1997 | Go to article overview

Consumers Seeing Red over Wave of ATM Surcharges


Keenan, Charles, American Banker


Fourth in a Series

Automated teller machine users are ticked off.

Though customers of banks and other financial institutions have never been thrilled to pay fees of any kind, the recent proliferation of ATM surcharges may be pushing them into outright hostility.

They vented their spleen in responses to the 1997 American Banker consumer survey, consisting of 1,001 telephone interviews conducted by the Gallup Organization during October and November.

Satisfaction with ATM services declined significantly over the last year. Though many use them for most of their banking, ATMs earned a quality rating well below what customers gave to general service levels at their principal financial institutions.

The survey participants-all heads of households with at least one type of deposit, investment, or credit account-were at least moderately satisfied with the availability of ATMs and the services they offered.

But the good news ended there for industry executives intent on keeping their ATM-cardholding customers-a number that held steady this year at 66% of the financial-consumer population-happy.

On a scale of 1 (poor) to 5 (excellent), 38% of ATM cardholders gave "prices charged" a 1. That was up from 24% last year, which was already far worse than the responses in past years' surveys to questions about fees and service charges in general.

When Gallup last asked a nationwide sample of consumers about overall pricing, in 1996, only 5% said their principal institutions were "poor."

Conversely, 28% last year said the institutions were "excellent" in pricing, not a good score but clearly ahead of the 17% in 1997 who gave ATM prices the highest rating.

The feelings ran so deep that credit unions, which do better than other types of institutions on almost all measures of customer satisfaction, did worst in ATM pricing.

Of cardholders who do most of their financial business with credit unions, 43% gave them a 1 on prices, up from 25% in 1996. Commercial banks' "poor" ratings rose to 37% from 25%-both numbers very close to the national averages of 38% this year and 24% in 1996.

"Consumers are mad as hell," said Stephen Cole, president and chief executive officer of Cash Station Inc., the Chicago-based automated teller network.

He and other observers said the obvious culprit is surcharges-the additional fees, now going as high as $2 to $3 or more-that customers pay to withdraw cash from machines owned by companies other than their card-issuing banks. Some customers are also charged transaction fees by their own banks, but those fees tend to be much lower.

"Those customers who now find themselves seeking out ATMs at their own institution are clearly irritated to do so," Mr. Cole said.

Surcharging began to be a national phenomenon in April 1996, when MasterCard International's Cirrus network and Visa U.S.A.'s Plus System gave up their resistance to the practice and changed their rules to allow it.

David Thomas, director of retail distribution for Banc One Corp. of Columbus, Ohio, said "1997 is really the first year surcharging has been widely applied. Now that is beginning to be reflected in the change of customers' attitudes."

One effect of surcharging, which was permitted in 14 states before MasterCard and Visa lifted their bans, has been rampant growth in installed machines, particularly away from bank premises. Faulkner & Gray, a Chicago-based newsletter company owned by Thomson Corp., which also owns American Banker, said the number of ATMs in the United States increased by 19% in the 10 months through June 30, to 165,000.

"The availability of more and more places to get ATM services seems to be overshadowed by the negative reaction to price," said Alan Pohlman, executive vice president of the consulting firm Carmody & Bloom in Ridgewood, N. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Consumers Seeing Red over Wave of ATM Surcharges
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.