Two major providers of personal and business bank accounts in the UK were recently raked over the coals by MPs after allegations that both banks had been blocking the use of cash machines at rival banks for their customers.
Lloyds TSB and RBS, both banks recipients of taxpayer bail-out cash from the government in 2008, have stopped allowing their basic current account customers to use cashpoints operated by any building society or bank besides their own. If the move is mirrored by other large high street banks such as Santander or Barclays, this could spell disaster for banking customers, warned consumer group Which?
The Treasury Select Committee has responded to the news, demanding an explanation from the top bosses of both RBS and Lloyds. Committee chairman, Andrew Tyrie, wrote to the banks, stating that their decision has serious repercussions for universal banking access, accusing them of seemingly targeting vulnerable bank customers who are most at risk of being excluded financially.
RBS changed over its ATM access this past August, which has left its basic current account customers having no choice but to draw cash from RBS machines exclusively. As basic account holders are usually those already haunted by less than stellar credit histories, these new cash machine restrictions are particularly harsh on them, said the select committee.
Meanwhile, Lloyds had already decreed that its basic account holders would not be able to use rival banks’ ATMs to access their cash. However, this could soon escalate into a ‘cash machine war,’ warned Which? policy adviser, Dominic Lindley.
If other banking institutions were to follow the lead of RBS, Mr Lindley predicted a possible future where many free-to-use cash machines are under attack.