Plan to fight crime with ATM fee does not add up
OPINION:Proposed ATM charge has everything to do with bullying customers into doing what the banks want us to do, writes FINTAN O'TOOLE
EVEN THOUGH he withdrew it rather awkwardly on Liveline yesterday, there was a certain logic to Dermot Ahern’s proposal to charge us every time we take money from an ATM bank machine. After all, we pay from our taxes to put the money into the bank – to the tune of at least €25 billion. Why shouldn’t we pay to take it out as well? There would be a certain symmetry to the fleecing, a full circle of effrontery. On one side of the equation, we pony up for the costs of pinstripe banksterism. On the other, we shell out because of the actions of a ruder, more traditional breed of bank robbers.
Despite his climbdown, Dermot Ahern’s view clearly remains, in essence, that the way to stop bank robberies is to abolish the use of cash. It is indeed pretty obvious that if there was no cash, there would be little point in bank raids. Ahern is evidently a follower of the criminological theories of the gentlemanly Depression-era American bank raider Slick Willie Sutton. Asked why he robbed banks, Sutton gave the elegant reply “Because that’s where the money is”.
Almost every time there is a so-called tiger kidnapping of a bank official, Dermot Ahern blames, in effect, all of us. The ultimate fault, in his view, lies with “the nation”.
Last November, he mused on RTÉ’s Morning Ireland: “The question must be asked why is it that we are one of those societies where there is a high proportion of cash in our system? Ourselves and Italy, we understand, are the two countries where there is a lot of cash in comparison with most of the other European countries. And this is something that I think we also have to look at as a nation ourselves.”
This train of thought might have been interesting if it had been followed all the way. What could Ireland and Italy possibly have in common that might create a shared preference for dealing in cash? Might it have anything to do with the kind of colourful cultural quirks that led, for example, to a serving minister for finance, Bertie Ahern, keeping large wodges of legal tender in his office safe? Alas, that is one tree Bertie’s namesake did not wish to look up. A serious attempt to consider why there’s so much cash in the Irish system would require a lot more effort than a glib proposal to tackle crime by charging ordinary consumers for access to their own money. And it might also uncover some realities that are best left hidden.
To be fair to Dermot Ahern, he didn’t start Fianna Fáil’s unhealthy obsession with the way we as consumers choose to pay for goods and services. In the December 2007 budget, then minister for finance, Brian Cowen, decided to declare war on the humble cheque, doubling the duty on each cheque from 15 to 30 cent. Two things, in retrospect, are especially interesting about his move. One is that, with the banking system about to implode, the Department of Finance was standing on the edge of the volcano, picking daisies. If only our alleged overuse of cheques had been the most worrying issue in our financial system, how much better off we would be now.
The other significance of this move is that the attack on the evils of cheques was a small example of a much bigger problem – the Government’s tendency to do whatever the banking lobby told it to do. The banks demanded that the use of cheques be discouraged. Brian Cowen, and the Department of Finance, which managed to ignore pre-budget submissions on behalf of children, the poor, carers and many others, responded by doing precisely what the banks asked. In its own tiny way, this episode typified the disastrously incestuous relationship between government and the banks.
There is certainly no real issue of principle here. Government policy on this whole issue has been inconsistent and incoherent. If the problem is that we use too much cash, why discourage the use of cheques? And why did Brian Cowen’s 2008 budget reduce duty on ATM cards from €10 to €5 if we are being bad citizens when we stick those same cards in the hole in the wall?
Likewise, in 2008, Micheál Martin (then minister for enterprise, trade and employment) made a welcome declaration that he was going to ban retailers from charging customers a surcharge if they pay by credit card – a power he was given under the Consumer Protection Act of 2007. This would have been a positive way of encouraging us to use plastic instead of cash. What happened? Nothing – the proposed ban was dropped.
Dermot Ahern’s latest intervention is in line with this history of half-baked notions. A moment’s reflection on his suggestion makes it obvious that it would not pass the Willie Sutton test. Even if you screw the ordinary customer at the ATM machine, there will still be plenty of money in the banks. To make any difference to the bank robbers, the amount of cash in the system would have to be reduced to a level far below that that could be achieved by any feasible charges.
The truth is that the idea of penalising customers for their effrontery in using ATM machines has very little to do with fighting crime and everything to do with bullying us into doing what the banks want us to do. The banks – and many businesses – don’t like cheques, don’t like dealing in cash and would be much happier if we all behaved ourselves, got with the programme and used plastic. They’d be positively ecstatic if we use credit instead of debit cards, leaving ourselves open to fees and surcharges.
The hypocrisy at the heart of all of this is that in our lives as consumers we are constantly told that the customer is always right and that the choice belongs to us. We can choose what we buy, but we are not supposed to choose how to pay. The customer is always right except when the customer makes the “wrong” choice. There is no consideration given to the fact that many people – especially those who are older – find cheques more reassuring than electronic transactions. Or to the reality that for many others – especially those who are struggling on tight budgets – cash is often a better way to control day-to-day finances than paying now through cards and getting a statement later.
The one thing that can be said for Dermot Ahern, though, is that he has performed a service for satire. In the 18th century, Jonathan Swift hailed the building of the Magazine Fort in Dublin with the lines: “Now here’s a proof of Irish sense/ Here Irish wit is seen/ When nothing’s left that’s worth defence/ They build a magazine.” Even Swift might be defeated by a government, that just as the money is running out, thinks of charging people for using ATMs.