- The Washington Times - Tuesday, April 9, 2002

First Union is among a handful of big banks failing to identify all of their automated teller machines, then charging their own customers fees to use the unmarked machines.

At Trump Plaza in Atlantic City, N.J., First Union charges all customers, including its own, $3 for using the cash machines. Then the bank charges First Union customers another dollar under the premise they are using an ATM not associated with the bank, even though the unmarked machines are, in fact, owned and operated by First Union.

A spokeswoman for Charlotte, N.C.-based First Union, which is owned by Wachovia, said Trump Plaza wanted to keep First Union's logo and name off the cash machines.

Critics say the bank decided to slap extra fees on its own customers.

"It's a serious problem in malls, airports and casinos," said Edmund Mierzwinski, consumer program director for the Public Interest Research Group (PIRG). "Banks set up subsidiaries of their holding company and claim those subsidiaries are not part of the bank and therefore the ATMs owned by subsidiaries can impose higher fees and surcharges."

Such machines are known as "white label ATMs" because their label is covered up, typically with paper.

Consumer advocates say the problem is growing, yet banks are faced with little litigation. Perhaps the most common cases are related to Charlotte-based Bank of America, which would not return calls yesterday.

The bank, the nation's largest, agreed to pay $700,000 to account holders in Washington state in September 2000 for operating white label ATMs at supermarkets. The bank is now being sued in a similar case in Nevada, Mr. Mierzwinski said.

"No one really knows how common or uncommon these machines are, other than the few publicized instances," said Ann All, editor of ATMmarketplace.com, an online publication tracking the industry.

Bank One, of Chicago, is one bank that openly charges its own customers for using some of its ATMs located at convenience and department stores. The bank operates machines called Rapid Cash, which charge all its customers $1 per transaction. Non-customers get charged 50 cents more per transaction.

CIBC, the Canada bank, has a similar practice.

Banking industry advocates say these banks have been candid about the practice so their customers are not being misled, as were customers of Bank of America in Washington and Nevada.

"I have not heard of this," said Bert Ely, a Washington area banking analyst, echoing the words of others in the industry. "I have a sense it's not a widespread practice."

Bank fees to take out cash are already hefty. Large banks, in particular, jacked up their service and ATM fees by 10 percent more than smaller banking entities between 1999 and 2000, according to the U.S. Federal Reserve.

Aside from the $1.50 to $2 surcharge that customers incur when they use an automated teller machine not affiliated with their banks, institutions are creating other fees to tack on to monthly statements.

Card fees and annual fees are not unusual, but the newer fees are those described in the fine print of account agreements. Such fees rose 3 cents to average $1.30 per transaction at large banks by 2000.

Small banks, meanwhile, lowered their fees by the same amount to $1.09 per transaction, and midsize banks kept the fees unchanged, averaging $1.23, according to the Federal Reserve.

This article is based in part on wire service reports.

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