ATM Fees and Fraud on the Rise: How to Avoid Transaction Fees and Protect Yourself

ATM Fees and Fraud on the Rise: How to Avoid Transaction Fees and Protect Yourself

By Caroline Willard
Executive Vice President, Markets and Strategy
CO-OP Financial Services

ATMs have been a part of the financial services landscape for decades, but these near-ubiquitous devices have been making news in 2016, owing to reports of high out-of-network surcharge fees and fraud.

Consumers, however, can go a long way to avoiding the fees and protecting themselves from fraud with a few simple steps that add up to not taking a visit to an ATM entirely for granted.

Surcharges Reaching 10-Year High

According to a new survey from Bankrate, fees for withdrawing cash from an out-of-network ATM are at a 10-year high – hitting a record average of $4.57 per transaction.

ATM fees were first introduced in 1994 when Triton Systems created stand-alone kiosks and realized that consumers would pay for the added convenience of being able to withdraw cash without visiting their bank. Financial institutions soon followed suit. ATMs on average now charge $2.90 to let non-customers withdraw money, and your own bank may also charge you for using an out-of-network ATM, which is now up to an average of $1.67. This means that an emergency withdrawal for the lowest amount of cash (typically $20) could cost you 23 percent in fees!

However, whether ATMs have reached “peak fee” is a question that remains in dispute. While many consumers now demand free checking accounts, they will be forced to pay the surcharge if they are in a bind and feel they have little choice but to withdraw cash at the nearest available location.

Below are the highest and lowest average ATM fees among the 25 cities in the Bankrate study. In a recent USA Today story, Greg McBride, an analyst from Bankrate said: “Rising ATM fees — the highest of which can be found in Phoenix, at an average $5.07 per transaction — hit low- and moderate-income households the hardest, as the fees eat up a greater percentage of their money.  But consumers are wising up. As fees rise, the number of out-of-network transactions is falling.”

Highest average ATM fees:

  1. Phoenix $5.07
  2. Atlanta $5.05
  3. Cleveland $4.98
  4. Miami $4.94
  5. Denver $4.88

Lowest average ATM fees:

21. Boston $4.33 (tie)
21. Philadelphia $4.33 (tie)
22. Los Angeles $4.28
23. Dallas $4.22
24. Cincinnati $3.92
25. San Francisco $3.90

Credit Unions Can Offer a Surcharge-free Nationwide ATM Network

One excellent way to avoid ATM surcharges is to join a credit union.

While credit unions were created to serve the local community, many are in fact participants in CO-OP ATM, which offers 30,000 surcharge-free ATMs across the country – the largest credit union-owned ATM network nationwide and larger than any single commercial bank network of ATMs. In fact, it is nearly twice the size of the largest bank ATM network – Bank of America has about 16,000 nationwide.


Members of participating credit unions have secure, convenient – and fee-free – access to accounts throughout the nation. ATM terminals within the network can be found at credit union branches and select retail locations, including 7-Eleven and Costco. Members can visit the CO-OP Locator on their computer or via their credit union’s mobile app to find the nearest location.

Protect Yourself from ATM Fraud

ATM fraud – particularly “skimming” – is increasing today. A skimming is a card reader that can be disguised to look like part of the machine. The card reader saves the users’ card number and PIN, which is then replicated into a counterfeit copy for theft.

One major reason is, ironically, is the growing adoption of EMV (“chip”) technology, designed as a security measure against card fraud. However, until EMV-compliant ATMs saturate the market, fraudsters are redoubling their exploitive efforts in the time remaining to them.

To protect yourself, always examine the ATM and look for anything out of the ordinary before inserting a card. Unusual splash screens or new external fixtures could indicate the presence of skimming equipment, cameras or malware. And if a device looks at all suspicious, you should report it immediately to the credit union, owner of the ATM or directly to law enforcement.

The keyboard and card slot on an ATM shouldn’t feel loose, rattle or jiggle when you pull on it. When you’re entering your PIN, cover the keyboard with your hand.

On the horizon, CO-OP is partnering with FIS to add FIS Cardless Cash to the CO-OP ATM network. This feature eliminates entirely the need to use a plastic card at the ATM to withdraw funds. A pilot is expected to launch in the first quarter of 2016.

In the meantime, by giving the ATM you visit an apprising eye before inserting your card will help ensure your ATM use remains a convenient way for you to securely withdraw needed funds.