SURVEY ESTIMATES 23% OF ATMS IMPOSE USER SURCHARGE.

Byline: Associated Press 

Nearly one-quarter of automated teller machines charge a transaction fee to customers who do not have accounts with the bank that owns the machine, according to a consumer survey released Thursday.

The U.S. Public Interest Research Group survey also estimates that the new fees could generate an extra $847 million in revenue for banks. That estimate, based on 1995 ATM transaction volume, assumes that 23 percent of the nation's ATMs charge a $1 fee to people who don't have accounts with the owner of the machine.

PIRG, a consumer group affiliated with activist Ralph Nader, surveyed the fee policies at 458 ATM machines in 20 states, and found 23 percent of the machines levy the new fees. The group said it expects the percentage to rise.

While most transactions at your own bank's ATM generally are free, banks generally charge their customers a fee for using ``foreign'' ATM, or machines owned by other banks.

In April, major ATM networks agreed to let banks owning the machines to charge users an additional fee - known as an ATM surcharge - to recoup their investment in the machines and their operation.

The surcharge, typically $1, is atop an interchange fee, which ATM networks charge banks for using their computer lines. The interchange fee is also typically passed on to consumers. That means customers can get hit twice using an ATM owned by a bank where they do not have an account: once by their own bank and also by the bank owning the ATM.

The new fees stirred outrage among consumers, leading to several hearings in Congress and a variety of bills to deal with the issue, none of which passed in the 104th Congress. The banking industry says consumers are warned about the fees on signs and on the ATM screen, and defends the practice as a legitimate charge for a consumer service.

Janice Shields, PIRG's consumer research director, said the 20 states selected for the survey represented a national sampling of the nation's regional ATM networks. The survey showed Texas led the list of states with ATMs that have the surcharges, with 100 percent of the machines examined by PIRG charging such a fee. Texas and 15 other states had been making these surcharges prior to April because banks had persuaded state legislatures to allow such a fee.

None of the ATMs surveyed in Alaska, Colorado, Massachusetts, Michigan and Washington had the surcharges, while only 2 percent of ATMs in New York, 4 percent in California and 5 percent in Oregon had such fees. Shields said that figure is only expected to rise, as a major California bank may begin surcharges soon.

After Texas, the survey said, North Carolina, Arizona, Virginia, Maryland and the District of Columbia had the highest number of ATMs levying the surcharges.