Indigenous consumers living in remote areas of Australia are often paying $20 – $40 per fortnight (or more) in ATM fees, significantly reducing the amount they can spend on food and other essential items.
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. All of these ATMs charge fees. EFT transactions also attract fees.
A report released today by the Australian Financial Counselling and Credit Reform Association (AFCCRA) found that ATM charges are generally either $2.00 or $2.50 per transaction, but the fee is as high as $10.00 per transaction in one community.
A person living on a Centrelink benefit receives $230 per week. ATM fees therefore often eat up between 10%-20% (and sometimes more) of an individual’s income each and every week. “Unavoidable ATM fees are trapping Indigenous consumers in a cycle of poverty” said AFCCRA Executive Director, Fiona Guthrie. “People living in remote communities need the same access to safe and affordable banking products as everyone else and this includes the ATM payment system.”
Indigenous consumers are often frequent users of an ATM. On the day Centrelink payments are due, many people check their account balance multiple times, waiting for the payment to arrive so they can buy food.
Indigenous consumers are also more likely to withdraw small amounts of money, on multiple occasions. This can occur for budgeting reasons, for cultural reasons or because food storage in remote communities is problematic and needs to be purchased every day.
“There is no quick fix to the problem, but a solution can be found if all of the players are prepared to come to the table to find one”, said Fiona Guthrie.
· The Reserve Bank has a responsibility to act. In March 2009, they introduced an access regime for the ATM payment system with the aim of improving competition and efficiency. This has clearly failed Indigenous consumers.
· ATMs in Indigenous communities are mostly owned by private providers. But Australia’s big banks also have a role to play. If they are serious about their social responsibility and “closing the gap” they could put new ATMs into these communities and introduce some competition.
· Centrelink, ASIC and the ACCC also have obligations because of the services they provide and legislation they administer.
Click here to view report.
Media Contact: Fiona Guthrie, Executive Director, AFCCRA – 0402 426 835