The higher the surcharge, the more likely consumers are to move their accounts to the dominant bank. Large banks contend the surcharge is a necessary fee for service, without which non-customers would be getting a free ride. But, in fact, banks are already compensated for non-customer ATM use. The bank that operates the ATM collects an interchange fee from the customer's own financial institution. This fee covers the cost of the transaction and often provides a profit to the ATM owner.
Surcharges are a second and unnecessary fee for the same transaction.
An Illinois consumer organization, the Coalition for Consumer Rights, called on the state to ban ATM surcharges at a news conference held this month. The group was joined by Representative John Fritchey, chairman of the House Consumer Protection Committee, who plans to introduce a surcharge bill in the coming weeks. This is a problem that is not going to go away, but it's going to worsen unless the Legislature does something. The report also found a correlation between higher fees and larger banking networks. The bill would not apply to national banks.