First Union Charges Own Cust. ATM Fees

Some banks are failing to identify all of their automated teller machines, then charging their own customers additional fees to use the unmarked machines.

In New Jersey, First Union imposes $3 surcharges on anyone using its cash machines at Trump Plaza –even if it's a First Union customer.

Then the bank adds another $1 fee for using another bank's machine, even though it really owns the unmarked ATMs, The Star-Ledger of Newark reported in Saturday's editions.

"Not only are they getting a fee from customers they shouldn't be getting, but they're gouging everybody," said Phyllis Salowe-Kaye, director of New Jersey Citizen Action, the state's largest consumer advocacy group.

The First Union Trump Plaza ATMs simply say "World Cash Center." The ATM screen has a picture of Trump Plaza and flashes a "Welcome to Trump Plaza" message when you insert your card.

Anybody who tries to withdraw cash from these ATMs cannot tell First Union owns them because the bank does not put its name on the machines or on the screens.

"It was at the request of the landlord," First Union spokeswoman Fran Durst said.

But critics say it was the bank's decision to charge its own customers fees for using the anonymous machines.

"It's one thing if the casino doesn't want the bank's branding in its casino, but it's something entirely different when that ATM is surcharging the bank's own customer," Bankrate.com financial analyst Greg McBride said.

Tracy Shelton, an attorney with New York Public Interest Research Group, described the practice of banks deploying unmarked ATMs and then charging their customers extra fees as a "very dangerous trend."

Chicago-based Bank One has unmarked machines known as "Rapid-Cash" ATMs that impose surcharges on Bank One as well as noncustomers.

Bank of America, a Charlotte-based bank, settled a class-action lawsuit this month, agreeing to pay $700,000 in damages to account holders in Washington state for operating undercover ATMs at supermarkets.

The lawsuit alleged the bank violated the Electronic Funds Transfer Act, which requires financial institutions to be upfront in explaining fees to customers who access their accounts through ATMs.

"We felt it was an important issue because customers didn't realize that these fees were going to their own bank," said Seattle attorney Adam Berger, who represented account holders. "There's a certain level of acceptance if you use another bank's machine that you're going to get charged. I don't think people recognize they could be charged by machines operated by their own bank."

Nationally, about 2.5 percent of First Union's 4,700 ATMs are unbranded, company spokeswoman Durst said. She said First Union is not trying to deceive its customers at Trump Plaza.

"We properly disclose in our deposit agreements with our customers that any time they use a non-branded ATM, they will be subject to a surcharge," Durst said.

But Berger, the Seattle attorney, disagrees. If an ATM is owned and operated by bank, then the machine belongs to that bank, he said.

"That's the natural reading," he said. "There's a common understanding or assumption your bank will not charge you for using their own machines."

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Author: 6 ABC-AP