/ Money

RBS restricts access to ATMs – 1m customers lose out

Man using RBS cash machine

If you have a basic bank account with RBS or Natwest, you’ll soon find it a lot harder to withdraw cash as you won’t be able to use rivals’ machines. But why punish the customers who can afford it least?

The Royal Bank of Scotland (RBS) is changing the terms of its basic bank account so that customers (including those who bank with Natwest, which it also owns) won’t be able to use rivals’ cash machines.

There are around 42,000 free-to-use cash machines in the UK, but only around 8,000 are operated by RBS/Natwest. So this change will exclude basic bank account holders from using over 80% of the UK’s free-to-use cash machines.

Inconvenience for basic bankers

There has been no press release issued by RBS announcing the change, but news has leaked out as letters land on the doorsteps of some of RBS’s 1.1 million basic bank account holders.

Basic bank accounts were developed to provide those who had previously been outside the banking system with access to a simple account without an overdraft that they could use to receive their wages, withdraw cash and pay bills.

It’s very difficult to function in society without access to a bank account and this kind of financial exclusion can lead to significant costs on the people who can afford it least.

Limiting the use of other cash machines is likely to inconvenience basic bank account holders and lead to extra costs and hassle if they have to travel further to obtain cash. Even worse, these changes could force them to stop using their account and go back to managing all of their money in cash – imposing extra costs at a time when they can least afford it.

Money-saving exercise

It seems as though RBS is making the change to save money. RBS UK retail bank made significant profits in the first half of this year, but the performance of the overall group was dragged down by losses in its corporate and investment bank.

We are calling for RBS to reverse its decision and for other banks to commit to offering universal cash machine access for basic bank account holders.

Do you think it’s fair that RBS is making these changes, which hit the most vulnerable? What impact would it have on you if you could only use your own bank’s cash machines?

Adam says:
18 August 2011

So whilst RBS are actually in profit they need to “save money” by punishing their customers? It is the corporate and investments that are loosing money – RBS need to learn to invest better and not pay their ‘top level’ staff so much in wages! Would be much simpler if they chose to not bill other banks when non RBS customers withdraw money from RBS cash points – the other banks would soon follow suit resulting in a positive market change not a negative one such as this.

What does the regulator have to say for itself?
Significant by it’s absence yet again…. why are we paying tax revenue for it?

pickle says:
18 August 2011

This is bad news – so often RBS machines are faulty and cannot be used. That’s when I go to a rival machine to get my cash – often very inconvenient. Hope Which? can persuade them to reverse this move.

Lawrence says:
18 August 2011

Why are we, the banks customer (my wife & myself) treated as cattle class. Give us your money but hey lets hold on to it by making it even more difficult to withdraw,is that now the banks attitude.
I bank in the Dorset branch (excellent helpful staff) Last Friday evening I needed cash but the cash machine was out of order and not for the first time. What did I do, go to one of their competitors and withdrew the cash.
CAN NATWEST Gaurantee their machines will operate 24 hours daily in future? I think not.


Gavin Bushell says:
18 August 2011

The answer is simple, move to another Bank, which makes even more sense in view of the impending transfer of RBS accounts in England and NatWest accounts in Scotland to Santander. Most banks are as bad as each other but Which’s customer satisfaction ratings on banks are a reasonable guide.

This seems like a return to how Cash Machines used to operate until somewhere around the mid-1980’s if I recall correctly.
The significant two differences then being that there were many more branches of all of the banks into which you could go and – dare I mention the Q word – Cash a CHEQUE! For free!

But the banks have been happily closing branches and forcing customers (who, I have to say, are generally all too willing) into using debit cards for everything so that now, when the cash machines are starting to return to how they were when new, it’s a whole lot worse off for customers.

I don’t have a cash machine card because I don’t have a PIN card (my debit card is still signature verified – see previous conversations about fraud and theft to understand how and why) so I generally get cash by asking for Cash-back in shops or by going into the bank branch and withdrawing over the counter. As long as Cash-Back in shops continues to be a free service I imagine this move will actually be a huge help to shops by drawing in lots of extra customers, who just want to get cash?

Liz B says:
18 August 2011

The restriction on cash machines is made worse by the fact that the more deprived the area, the less likely it is to have multiple cash machines to choose from or the more likely it is to have ones which charge for use.

I live in East London. If you go to the Lansbury estate shopping precinct in Poplar E14 you are overshadowed by the giant Canary Wharf towers. And yet within that precinct (which is used largely by some of the poorest people in the country, who will be forced to have basic bank accounts) there is no Natwest/RBS cash machine. These people will have to pay to travel to Canary Wharf in order to get money out each time – a bus journey of £1.30 single.

Even where I live (in Bow) although there is a small Nat West bank down the road, if its machines are out of money then the basic bank account users won’t be able to use the few other cash machines in the area but will have to get on the bus to Stratford or Whitechapel.

It’s not just inner city poverty though – I am aware that there are large areas of the West Country, for example, without multiple cash machine access.

And there is little chance that people with basic bank accounts will be able to move banks – the banks only created basic bank accounts because the previous Govt forced them to do so. It’s not making money for the banks so they’re not going to want to take on new applications from former RBS/Nat West customers.

IrvSwerve says:
18 August 2011

Could there be a technical reason for this move? Holders of these accounts are not permitted any overdraft so could it be that some are mis-using the facility by drawing more than their balance which can only be prevented by limiting usage to RBS ATM’s.
The only other reason could be that RBS is charged fees by the ATM network which does not apply to the use of their own machines.
You say they are making the change to save money. I suggest Which asks them to be more specific.

In reply to the last posted comment about mis-use of limits
It now doesn’t matter who / where you bank the card limit cannot be exceded each day and gone are the days when you could go from machine to machine in quick sucession and draw your card limit before the system “caught up” as it used to be updated twice a day (lunchtime & early evening) so this is not an excuse the banks can use, their “real time” technology will not allow over-withdrawal
This is just another way that the banks get to control us and our use of OUR money, if we all put it “under the matress” for a few weeks by drawing over the counter and not using them at all they would soon get their act together and stop this nonsense
PS I am a NatWEST customer, and have been for over twenty years, but if they continue down this route I will move elsewhere

Sophie Gilbert says:
19 August 2011

With all the progress that has been made in our society since its beginning (eg human rights including women’s) we still haven’t managed to eradicate poverty and what’s more we seem to continue to make it worse. I agree with Gavin Bushell. Let’s vote with our feet.

Graham says:
19 August 2011

This move is quite disgraceful. These banks contributed to the financial crisis we are in, our money has bailed them out. But they have no social conscience whatsoever and this move is particularly obnoxious

Maureen says:
19 August 2011

Oh this is disgraceful – punishing those who can least afford it. My daughter has a basic Nat West A/C, but doesnt live near any Nat West/RBS cash machines. So she will have to use petrol she can ill afford to buy to drive to one of their machines?
This needs campaigning against.

Keith OSBORNE says:
19 August 2011

This will be another nail in the coffin of common sense. Surely the free interchange in the use of cash machines must work out to be equitable in relation to the number of accounts held by each of the banks. It must also lead to the other banks following suit and we will all end up paying a levy for using ATM machines. In a rural area there is a single branch in the local market towns – if their ATM is out of order and they are closed you will be penalised for the bank’s failure.
On the other hand do I understand that Post Offices will be able to pay cash on a Natwest card? If so it would mitigate the problem – as long as the PO chain continues to be allowed to survive; this facility might even help some of them become more viable.
Really I would prefer to accept the status quo before deciding whether to change to a more sympathetic bank – The Co-op comes to mind. The banks should remember that it is the retail sector that provides the core perception of banks in the mind of the consumer……….they need all the positive publicity they can get……

Fred says:
19 August 2011

As previously mentioned I expect it is because Basic Current account customers are not allowed an overdraft. If they have no money in their account but use another banks cash machine they are able to cash up to their cash card limit. But a NW/RBS machine would be aware of the customers balance and refuse any withdrawal.

Sorry – that one doesn’t wash (whether it’s RBS’s line or just Fred’s guess) because the ATM network is the same as the Card Authorisation network for terminals in shops.
Therefore if the scenario Fred suggests was to exist, customers would also be able to spend over their bank account limit / balance in shops too, which we know is not the case and indeed is a major point of having the EFT terminals rather than the old manual ones.

As I posted earlier, free withdrawals disappearing is just a return to how things were in the 80’s and before. That doesn’t make it right but Fred’s scenario could not be used by the banks to justify this (unless the banks think we are all even more crackers than even I thought they did!!!!)

Expatantigua says:
19 August 2011

If I find out that my account is restricted, having been with RBS since 1967(!!), I will leave.

Expatantigua says:
19 August 2011

What about using your bank card overseas? Not too many RBS machines in Spain.

It comes down to how the bank wants to spread the cost of running its services.
Make sure each person or group pays their way or allow the accounts which make money for the banks to pay the running costs of those which do not make money for the bank.
The bank has to decide what its customer base wants and which customers it can afford to loose.

Rose says:
21 August 2011

This is definitely a step back to the dark ages – if it was 1 April I would have assumed it was a joke!
Great that Which is going to campaign about it. We really need the government, our MPs and the financial regulators stopping this type of action.
Very few villages/small towns have more than one bank now so it’s even more important that almost anyone can use the cash machine to draw out their cash, whatever their bank. Either that or the government needs to set up a “people’s bank” that we can all switch to, with cash machines in every town and village. Better that than bailing out the morally-deficient, money-grabbing banks that we have currently.
The big banks have had their way for far too long and are getting too heavy handed, especially with their long-term customers. Something needs to be done and now!

Gillian Dalley says:
21 August 2011

Can we start an e-petition calling on the government to require RBS to refrain from imposing this restriction? Yet again it is the poorest in society who lose out in banks’ attempts to make money (which will then be funnelled through to senior people in the form of bonuses). As taxpayers we own RBS so we have a right to make our views known and acted on.
Apparently it can be done though the following link: http://epetitions.direct.gov.uk/

Kelly says:
26 August 2011

Unbelievable! Have just received a call from RBS to discuss the need to upgrade my account due to these restrictions coming in – what a suprise after running through the system I am not eligible for an account upgrade to a normal current account so all they can offer me is some sort of “Silver” account which costs £8 per month – am guessing this is a “proper” current account so I obviously am eligble but they just want to make their £8 per month!! Disgusting!