Sneaky Fees - Brief Article

Kiplinger's Personal Finance Magazine, Jan, 2001 by Kristin Davis

BANKING | Some ATMs go incognito to drain cash from your account.

TRUE OR FALSE: You can avoid fees by using an ATM owned by your bank. Sometimes false, as Jeremy Knapp learned when, three times, he used an "unbranded" ATM at a supermarket in Seattle. Each time he paid a $1.50 posted surcharge (which goes to the owner of the machine) plus $1.75 to his bank for a nonbank transaction.

Then Knapp noticed that his bank, Bank of America, did own the machine. Although the ATM was unmarked, it spit out a receipt showing Bank of America's name and logo. When Knapp complained, he got a refund for the charges, but the bank continued to charge for withdrawals.

In a lawsuit that seeks class-action status on behalf of thousands of Bank of America customers, Knapp argues that the fees violate his customer agreement, which says he won't be charged for using the bank's own ATMs. Bank of America, citing the litigation, declines to comment.

Charlotte Birch, a spokeswoman for the American Bankers Association, says Bank of America isn't alone in installing anonymous ATMs. "Some machines are in places where the rent is high," Birch says. "If the machine were branded and unable to assess a surcharge, it would operate at a loss." Birch adds that surcharges are disclosed, and "you can decide whether the convenience is worth it to you." Consider yourself warned.