Ohio bank customers who use other banks' automated-teller machines pay the highest ATM fees in the nation, charges that are roughly treble the level of five years ago, the Ohio Public Interest Research Group said yesterday.
Michigan bank customers pay the second highest in the nation, a related chapter to the group said.
A survey of 22 Ohio financial institutions, including 11 in the Toledo area, is “frankly shocking,” said Melissa Poague, campaign director for the nonprofit group, at a news conference in Toledo.
Ohio banks charge an average of $3.50 for an ATM transaction at another institution's machines - $1.91 surcharge by the other bank and a $1.59 “foreign fee” by the customer's bank for using someone else's ATM, Ms. Poague said. The national average is $2.86, including a $1.47 surcharge and $1.39 “foreign fee,” the group found.
A survey of 14 banks across Michigan found banks charged an average of $3.38 in ATM charges - $1.63 surcharge and $1.75 foreign fee.
The national average is $2.86 in combined ATM fees, according to the U.S. Public Interest Research Group.
Bankers say ATM fees are necessary to cover the costs of offering machines, especially those in nonbank locations, such as stores. “If an ATM is not in a bank, it costs more to service it,” said Karen Fraker, vice president of marketing for Fifth Third Bank (Northwestern Ohio). “There's a cost associated with convenience.”
Bill Eiler, a spokesman for Cleveland-based National City Bank, said consumers do not pay a surcharge if they use their own bank's machines. “Surcharges are for noncustomers,” he said. The fees help pay to maintain the machines, provide security, and keep the machine stocked with money, he added.
In a statement, American Bankers Association Vice President Donald G. Ogilvie also defended ATM fees, saying they have allowed an explosion in the number of ATMs across the country.
“Without this new source of revenue, thousands of these new ATMs would have to be shut down and, unfortunately, leave consumers with fewer choices,” he said.
But Megan Owens, a spokesman for the Public Interest group in Michigan, called the fees “double-dipping,” and said banks are charging too much for transactions that only cost them between 50 cents and 70 cents. She also pointed out that ATMs are saving banks money, because they cut down on the cost of hiring tellers.
“They will say it's a convenience charge. But the big question is, has our convenience tripled in the last five years?” she said. “Yes, it does cost them something to keep the ATMs running, but it's nowhere near this amount.”
Before Visa and MasterCard began allowing bank surcharges in 1996, consumers paid only a single “foreign” ATM fee to their own banks, averaging just over $1, Ms. Poague noted.
“Double-dipping ATM surcharges now mean triple costs for consumers,” she said at the Toledo Fire Fighters Federal Credit Union on Laskey Road.
The credit union was selected for the announcement because it was the only institution out of the 22 in the survey that charges no ATM fees, she said. Several other credit unions, including some in the Toledo area, had fees as low as 50 to 75 cents.
The PIRG survey showed that bank and thrift ATM surcharges ranged from $1.50 to $2, and “foreign” fees ranged from 75 cents to $2 around the state.
A national survey by U.S. Public Interest Group found that 94 percent of banks have surcharges. Ohio's fees were highest and Michigan second highest in ATM transactions involving two banks among 26 states in the national survey. Next were Louisiana, $3.28, and Virginia, $3.19. Lowest in cost was Georgia, at $1.25. Some states, such as Iowa, which prohibits surcharges, were not surveyed.
In the Ohio survey, the highest ATM surcharges and foreign fees were at Charter One Bank, at $4, and the lowest were at a Cleveland-area institution with no ATMs of its own, at $1.00 for foreign fees. In between were Fifth Third, $3.25; National City Bank, $3.50; KeyBank, $3,75; and Sky Bank, $3.75.
Ms. Poague said a national trend has hit Ohio - annual ATM fees. In the group's survey nationwide, 18 percent of banks surveyed imposed annual card rental fees averaging $13.76. So far, Ms. Poague added, only one Ohio bank has imposed the fee, First Merit, which charges $12 a year.
Her advice to consumers: “Use your own ATM when possible. Shop around when using a bank. Join member-owned credit unions or open accounts at small banks. Small banks and credit unions consistently charge customers lower rates on most fees and accounts than big banks.”
The Associated Press contributed to this report.