One in four ATMs now charge Scots customers to withdraw cash

It has led to fresh demands for action to preserve the nation’s access to cash, as bank branches vanish.

READ MORE: The free cash machine scandal - how ATM loss is affecting your area

It comes as thousands of Bank of Scotland, Halifax and Lloyds customers were left without access to their accounts yesterday after the group’s online banking websites crashed for several hours.

Customers of the Lloyds Group, which has more than 13 million active online customers, began complaining about being unable to access the banks’ websites and smartphone apps from around 4am on New Year’s Day.

In the past four months alone, nearly 300 free cash machines have been lost to Scotland - at a rate of 75 a month.

On top of that new LINK data shows that the rate of loss of free-to-use cash machines in Scotland has risen to 14 every week in the past year. That’s up from one in ten in the year to July.

READ MORE: One in five cash machines in Scotland to charge in a year

The Herald revealed stark warnings in May from the ATM Industry Association that nearly one in five of Scotland’s free to use cash machines were expected to introduce charges to customers in the following 12 months.

It comes after banks have cut the fees paid to ATM operators when a customer uses a free cashpoint, causing many to switch to paid-for models.

The shock figures emerged less than a fortnight after Adrian Roberts, LINK’s chief commercial officer told MSPs: “It is absolutely not acceptable for people to have to pay to access their own cash.”

The falling number of cashpoints is seen as a concern for elderly or vulnerable bank customers who do not use online banking, and for small businesses who rely on access to cash.

Scotland has already seen over 400 bank branches close since 2015, making it one of the worst affected areas in the UK, and often the cashpoints will also go. Banks who have made the cuts consistently say that it is the result of customers preferring to use online, mobile or telephone banking while usage of branches has fallen.

Which? said the new figures showed how the UK government should step in to protect people’s access to cash.

READ MORE: South Lanarkshire town that was left with no banks

Jenny Ross, Which? Money Editor, said: “Countless Scottish communities are being stripped of free access to cash at an alarming rate that could hit the most vulnerable in our society the hardest, while denying many people free withdrawals.

“Mismangement by the industry and regulators has led to a massive spike in fee-charging machines, while rampant bank branch and cashpoint closures are stripping people of vital cash access and have left the cash landscape on the brink of collapse.

“The UK’s new government should seize the opportunity to act now and introduce legislation that protects this important payment method for as long as it is needed.”

Last month, the Herald revealed that ministers had refused to intervene in the access-to-cash crisis.

A UK government response said: “Government cannot reverse the changes in the market and in customer behaviour, nor can it determine firms’ commercial strategies in response to those changes. However, the Government will continue to work with the sector to maintain access to vital banking services and ensure that banks support communities across the UK when their local branches close.

“The Government is committed to safeguarding access to cash and proud that Scotland and the rest of the UK has an extensive free-to-use ATM network.

"However, it is important to note that as consumers use digital products more to make and receive payments, the demand for cash and ATMs will continue to fall. While industry must have the flexibility to take such trends into account when making decisions on how best to provide their services, the Government expects commitment from industry to protect access to banking and cash for those who need it.”

New details about the decline of ATMs comes after the north-west Highlands village of Durness, where locals have to drive for an hour to get to their nearest free ATM, became the first to receive a cash machine as part of a LINK pledge - and it was due to come online last week.

LINK has received 275 separate requests for free access to cash across Scotland, raising fears they won’t be able to cope with demand.

READ MORE: Scottish people pay price as one in seven can't use bank cards due to IT failures

In August the ATM overseers said that should a high street be threatened with the loss of an ATM or Post Office, it would step in to ensure that a cash machine is made available and paid for with funding from all the UK’s main banks and building societies.

And in October, it invited consumers and community groups to put in requests for an ATM through the Community Access to Cash Delivery Fund.

Supported by the banks and building societies, LINK said it was part of a “pilot” to support communities across the UK with cash access issues.

The new figures from LINK show that despite calls for better access to cash, in November there were 5866 free and chargeable cash machines in Scotland - 178 fewer than over a year.

There were last month 4470 free to use ATMs, 743 fewer than the same time last year.

LINK have said they are expecting to approve between 25 and 30 new free ATMs over the next few months while admitting “more still needs to be done” to protect cash access. It will take three to six months to install after approval. LINK has already been touch with 30 of the 275 of those who feel there is a need for a free cash machine.

A second free ATM due to be installed in Gartcosh after the local tenants and residents association called for help.

It is understood a free ATM machine was voted the second most commercial asset requested by residents in a recent community survey only surpassed by a GP surgery.

The Access to Cash Review, chaired by Natalie Ceeney CBE, concluded in March that digital payments did not yet work for everyone and around eight million adults - 17% of the population - would struggle to cope in a cashless society. It also found that cash is only used for three in every ten transactions, down from six in ten a decade ago and is forecast a fall to as low as one in ten transactions within the next 15 years.

It concluded that this shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure which currently costs around £5 billion a year to run.

The government says industry statistics state that cash is being used in a decreasing proportion of UK transactions, falling from 60% of payments in 2008 to 28% in 2018.

Correspondingly, the number of ATM transactions is declining, with volumes expected to be around 10% lower in 2019 than 2018.

A Bank of Scotland spokeswoman said of the latest online issues: "We're aware that some of our customers are experiencing problems logging on to Online Banking. We're working to resolve the issue as quickly as possible, and apologise for any inconvenience caused."

In October, MPs condemned the level of IT failures at banks, saying in a Treasury Committee report that the frequency of online banking crashes and customer disruption was "unacceptable".