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Young homeowners are more likely to use their home as an ‘ATM’ than their Boomer parents. Here’s why

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/rachel-ong-viforj-113482">Rachel Ong ViforJ</a>, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a> and <a href="https://theconversation.com/profiles/christopher-phelps-378137">Christopher Phelps</a>, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a></em></p> <p>For many Australians, the family home is their largest financial asset. With an increasing variety of ways to tap into home equity, the temptation to access this wealth is ever growing.</p> <p>Homeowners increase the debt owed on their home when they borrow against their <a href="https://doi.org/10.1080/02673037.2013.783202">equity</a>. Standard mortgage home loans now provide facilities for relatively cheap or free withdrawals of equity from the home.</p> <p>This turns the <a href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">home into an ATM</a>, which borrowers can access when they choose.</p> <p>Our new <a href="https://doi.org/10.1080/02673037.2024.2400158">study</a> asks what motivates Australians to tap into their home equity, and how does this behaviour change with age?</p> <p>Surprisingly, despite having much lower housing equity levels, younger homeowners borrow often, and borrow more, than their Boomer parents.</p> <h2>How common is equity borrowing?</h2> <p>Using 15 years of data from the government-funded <a href="https://melbourneinstitute.unimelb.edu.au/hilda">Household, Income and Labour Dynamics in Australia </a>(HILDA) survey, we tracked the mortgage debt and repayments of homeowners aged 35 and over.</p> <p>The chart below shows younger owners are far more likely to engage in equity borrowing.</p> <p>In 2006, nearly 39% of the youngest homeowners, aged 35–44, borrowed against their home equity. By 2021, this number had dropped to 29%. Despite the decline, it’s still 24 percentage points more common than those aged 65 and over. The older group has remained steady at about 5% over the years.</p> <hr /> <p><iframe id="Ll9Cw" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/Ll9Cw/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <h2>How much do equity borrowers withdraw from their home?</h2> <p>Among those who use their home like an ATM, younger borrowers now withdraw larger amounts than older borrowers.</p> <p>In 2006–07, equity borrowers aged 35–44 and 45–54 withdrew on average $43,000 and $57,000, respectively (expressed in real values set at 2022 price levels). By 2021, the amount withdrawn by these two age groups had climbed to $70,000 and $100,000.</p> <p>On the other hand, the amount withdrawn by borrowers aged 55 or older fell from more than $50,000 to less than $40,000.</p> <hr /> <p><iframe id="ujq3S" class="tc-infographic-datawrapper" style="border: 0;" src="https://datawrapper.dwcdn.net/ujq3S/" width="100%" height="400px" frameborder="0" scrolling="no"></iframe></p> <hr /> <h2>What motivates equity borrowing?</h2> <p>Young homeowners’ equity borrowing behaviours are sensitive to changes in house prices and debt values, and their financial risk preferences. Among those aged 35–44, a $10,000 increase in the primary home value raises the likelihood of equity borrowing by ten percentage points.</p> <p>Every $10,000 in debt against the primary home reduces the likelihood by 2.8% percentage points. Those willing to take substantial financial risk are eight percentage points more likely to borrow against their home than those who are risk-averse.</p> <p>Those aged 65+ are not inclined to borrow, and exhibit little change in equity borrowing behaviour with variations in asset, debt, income or financial risk preferences.</p> <h2>Why borrowing practices differ between age groups</h2> <p>As well as being more likely than older homeowners to borrow against equity, the younger group also withdraws higher amounts than their Boomer parents.</p> <p>This is despite younger borrowers already carrying much higher debt against their primary home. Among those in our study who engaged in equity borrowing in 2021, the median debt before borrowing was $401,000 for 35-44 year-olds compared to $0 for those aged 65+.</p> <p>As real house prices have risen over decades, the current generation of young homeowners has had to invest more money into purchasing their first home than previous generations.</p> <p>It’s therefore not surprising the primary home is now widely viewed as a financial resource to be <a href="https://theconversation.com/your-home-as-an-atm-home-equity-a-risky-welfare-tool-22000">tapped into to meet spending needs</a>.</p> <p>On the other hand, most Baby Boomers bought their first home at more affordable prices than their children, and at lower levels of debt. Now they don’t appear to be spending their kids’ inheritance by drawing down housing wealth.</p> <p>In fact, older parents may shy away from equity borrowing to <a href="https://www.pc.gov.au/research/completed/wealth-transfers/wealth-transfers.pdf">bequeath wealth to children</a>. Some also <a href="https://doi.org/10.1017/S0047279417000058">dislike passing debt</a> on to their children.</p> <p>Older people may also avoid equity borrowing due to concerns about <a href="https://treasury.gov.au/sites/default/files/2023-08/p2023-435150.pdf">aged care costs</a>. Some may be hampered by <a href="https://doi.org/10.1016/j.jue.2013.08.003">poor financial literacy</a>.</p> <h2>More debt ahead without policy changes</h2> <p>Present trends suggest young homeowners will remain indebted for longer periods, and more and more will <a href="https://theconversation.com/more-of-us-are-retiring-with-mortgage-debts-the-implications-are-huge-115134">retire with mortgage debt</a>.</p> <p>For indebted retirees, there are real prospects of <a href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">drawing down of superannuation</a> to pay off mortgages in retirement.</p> <p>This may impose extra burdens on the age pension system. Another unwelcome consequence, which may add to health costs, is the prospect of <a href="https://www.ahuri.edu.au/sites/default/files/migration/documents/AHURI-Final-Report-319-Mortgage-stress-and-precarious-home-ownership-implications-for-older-Australians.pdf">debt-related psychological distress</a> among those who can’t pay off their mortgage in old age.</p> <p>If the current trends continue, the <a href="https://www.afr.com/policy/economy/what-happens-when-australia-s-boomers-hand-5-trillion-to-their-heirs-20240515-p5jdvf">great wealth transfer</a> that has already begun looks set to <a href="https://theconversation.com/not-everyone-wins-from-the-bank-of-mum-and-dad-73842">further entrench inequality</a> between those who have access to the bank of mum and dad and those who do not.</p> <p>Encouraging older people to use their housing equity to fund their needs in old age may lighten fiscal burdens on younger generations. But policy reforms will be needed to relieve concerns about the risks of equity borrowing in old age.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/238924/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><a href="https://theconversation.com/profiles/rachel-ong-viforj-113482"><em>Rachel Ong ViforJ</em></a><em>, ARC Future Fellow &amp; Professor of Economics, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a> and <a href="https://theconversation.com/profiles/christopher-phelps-378137">Christopher Phelps</a>, Research Fellow, School of Accounting, Economics and Finance, <a href="https://theconversation.com/institutions/curtin-university-873">Curtin University</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/young-homeowners-are-more-likely-to-use-their-home-as-an-atm-than-their-boomer-parents-heres-why-238924">original article</a>.</em></p> </div>

Money & Banking

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The massive catch behind banks removing ATM withdrawal fees

<p>Consumer group Choice has revealed the massive catch behind banks removing their ATM withdrawal fees after the big four’s surprise announcement this week.</p> <p>Commonwealth Bank made headlines on Sunday when it announced that it would be abolishing additional ATM withdrawal fees for customers from other banks, with NAB, ANZ and Westpac quickly following suit. </p> <p>But as Choice points out below, it would be a mistake to think that the big four banks have completely abandoned the idea of <a href="http://www.oversixty.com.au/travel/travel-tips/2017/08/travellers-warned-about-currency-conversion-swindle/" target="_blank"><span style="text-decoration: underline;"><strong>slugging customers with extra fees</strong></span></a>. </p> <blockquote class="twitter-tweet"> <p dir="ltr">.<a href="https://twitter.com/Bankwest">@Bankwest</a> still charges you $2.50 to use their ATMs if you’re not customer.<br />Tell them you want an end to ATM fees: <a href="https://t.co/qfy9aupRVY">https://t.co/qfy9aupRVY</a> <a href="https://t.co/URHNqQzr9b">pic.twitter.com/URHNqQzr9b</a></p> — CHOICE (@choiceaustralia) <a href="https://twitter.com/choiceaustralia/status/912180052791406592">September 25, 2017</a></blockquote> <p>While additional charges for non-customer ATM withdrawals have been abolished at 3,400 CommBank machines, 2,300 ANZ machines, 2,925 Westpac machines and 1,300 NAB machines across the country, Commbank subsidiary Bankwest will retain the charges. In addition, 3,100 NAB-branded rediATMs located at pubs, clubs and stores around the country will continue to charge extra fees for non-customers.</p> <p>That said, the bank’s decision has still been widely applauded, although consumers have been warned to be wary and check if other fees have been increased.</p> <p>Australian Bankers’ Association chief Anna Bligh told <a href="http://www.skynews.com.au/" target="_blank"><span style="text-decoration: underline;"><em><strong>Sky News</strong></em></span></a>, “Customers can look at their own statements and see whether any other fees have been increased. But banks have made it clear that that’s not what they’re going to do, that they will take this as a cost of keeping their customers, and getting the best opportunity to win more customers.”</p> <p>What are your thoughts?</p>

Money & Banking

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The ATM celebrates 50 years but we’re using it less

<p><em><strong>Steve Worthington is an Adjunct Professor at Swinburne University of Technology. </strong></em></p> <p>As the Automatic Teller Machine (ATM) celebrates its 50th birthday, it’s actually being used less and less to withdraw cash in Australia. There are currently more than 32,000 ATMs across Australia and <span style="text-decoration: underline;"><strong><a href="http://www.rba.gov.au/payments-and-infrastructure/resources/statistics/payments-data.html" target="_blank">cash withdrawals</a></strong></span> in February 2017 were A$9,924 million, down 10% from the previous year and just above the total of February 2005.</p> <p>ATM’s (Automatic Teller Machines) were first introduced at the end of June 1967 and were welcomed by both bank customers and the banks themselves. This “hole in the wall” enabled customers to access their cash 24/7. The ATM’s self-service nature enabled the banks to reduce their costs, by closing bank branches, reducing opening hours and laying off staff.</p> <p>But the Reserve Bank of Australia’s <span style="text-decoration: underline;"><strong><a href="http://www.rba.gov.au/publications/bulletin/2017/mar/7.html" target="_blank">2016 Consumer Payments Survey</a></strong></span> reported that cards were used more often than cash for in-person payments, as well as online payments. This is facilitated by Australian consumers and merchants’ rapid adoption of contactless.</p> <p>The July 2017 changes to the level of merchant service fees for accepting payment cards might even further reduce our reliance on these machines. The changes should reduce surcharging and minimum spends for accepting cards (in theory) and we will then have even less reason to carry cash.</p> <p>ATMs will need to evolve to remain relevant, perhaps taking on other services entirely.</p> <p><strong>Lots of cash, just not from ATMs</strong></p> <p>Paradoxically, there has never been so much cash available in Australia. By April 2017 there were <span style="text-decoration: underline;"><strong><a href="http://www.rba.gov.au/publications/annual-reports/rba/2016/banknotes.html" target="_blank">1.5 billion individual banknotes</a></strong></span> on issue, an average of 62 notes for every Australian. The RBA has recently opened a new super bank vault to store <span style="text-decoration: underline;"><strong><a href="http://www.rba.gov.au/about-rba/corporate-plan.html#7-banknotes" target="_blank">its contingency reserves of banknotes</a></strong></span>.</p> <p>There are similar patterns in other countries. For example, the <span style="text-decoration: underline;"><strong><a href="http://www.bankofengland.co.uk/banknotes/Pages/about/stats.aspx" target="_blank">Bank of England notes in circulation rose</a><a href="http://www.bankofengland.co.uk/banknotes/Pages/about/stats.aspx"></a></strong></span> by 10% in 2016, the fastest pace in a decade. This is despite technological advances that now allow people to pay by contactless cards and digital devices, such as mobile phones.</p> <p>Why then is cash still so popular? The RBA’s <span style="text-decoration: underline;"><strong><a href="http://www.rba.gov.au/publications/bulletin/2017/mar/7.html" target="_blank">2016 survey</a></strong></span> concluded that cash is widely held as a store of value. If found 70% of respondents to the survey held cash in places other than their purses and wallets.</p> <p>The government’s <span style="text-decoration: underline;"><strong><a href="https://www.google.com.au/search?q=black+economy+taskforce+interim+report&amp;oq=black+economy&amp;aqs=chrome.1.69i57j69i59l2j0l3.8227j0j4&amp;sourceid=chrome&amp;ie=UTF-8" target="_blank">Black Economy Taskforce estimates</a></strong></span> that the Australian black economy is around 1.5% of GDP, or A$25 billion per year. Much of this is enabled by the use of hard cash, as opposed to electronic payments.</p> <p><span style="text-decoration: underline;"><strong><a href="https://www.amazon.com/Curse-Cash-Kenneth-S-Rogoff/dp/0691172137" target="_blank">Harvard professor Kenneth Rogoff wrote</a></strong></span> that physical cash can facilitate corruption and tax evasion. In his view, many of the disadvantages of cash could be reduced if larger denomination notes were withdrawn from circulation.</p> <p>As an example, the Euro 500 note is due to be withdrawn from the end of 2018, however it may take more than this to reduce the underlying attraction of cash.</p> <p>There are many assumptions, attitudes and beliefs which legitimise and perpetuate participation in the black economy. Questioning these will require behavioural change from all citizens, according to the <span style="text-decoration: underline;"><strong><a href="http://kmo.ministers.treasury.gov.au/media-release/040-2017/" target="_blank">Black Economy Taskforce’s interim report</a></strong></span>. As an example, if someone else is avoiding GST by paying in cash, others might think “well if they are doing it, I would be a fool not to do it myself”.</p> <p><strong>Other uses for the ATM</strong></p> <p>These are services available to bank customers through their ATMs in countries other than Australia. For example, ATMs could be made more efficient by encouraging more customers to deposit cash into the ATM and then recycling that cash in the machine to be used by those seeking to withdraw cash. This would remove many of the costs and security risks of constantly replenishing ATMs with cash.</p> <p>Additional functions could be added to the ATM. In the United States you can buy postage stamps at the ATM; in Spain tickets to football matches; in Dubai bars of gold; in California fresh cupcakes and elsewhere fishing licenses and tax bills can all be accessed through ATMs.</p> <p>As regards customer security to ward off identity theft, biometric measures could make access to the ATM more secure. In Japan finger vein scanning is already in use in many ATMs.</p> <p>These developments could put ATMs in the forefront of an enhanced customer experience, giving the ATM reasons to survive for another 50 years.</p> <p><em>Written by Steve Worthington. First appeared on <a href="http://www.theconversation.com" target="_blank"><strong><span style="text-decoration: underline;">The Conversation.</span></strong></a><img width="1" height="1" src="https://counter.theconversation.edu.au/content/79847/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation"/></em></p>

Retirement Life

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Smartphones will soon dominate digital payments

<p>If cash is king, there's a revolution in the land.</p> <p>Plastic started to dislodge cash from its throne, now smartphones and online payments are set to finish the job.</p> <p>The Reserve Bank of Australia figures show ATM withdrawals peaked at in 2009-10 and have been on the slide ever since.</p> <p>More than three out of four face-to-face payments are now estimated to be tap and go, according to Leila Fourie, the chief executive of the Australian Payments Association.</p> <p>Cash is falling out of favour in other ways too.</p> <p>The rise of the subscription economy is a big trend, where goods and services and paid by direct debit.</p> <p>For example, a subscription to Netflix or Lightbox has supplanted the video store, gym memberships are on rolling monthly payments, while companies are providing different ways to shop for groceries.</p> <p>Mike Ebstein, the founder of payments consultant MWE Consulting, estimates that recurring direct debit payments would be about 10 per cent of of the value of credit card payments.</p> <p>Meanwhile, in-app payments such as in rideshare and taxi services Uber and GoCatch provide yet another way to do away with cash.</p> <p>And pretty soon Australia's Reserve Bank's New Payments Platform will make electronic payments from bank account to bank account in that country even faster and easier, meaning you'll be able to pay online for that secondhand fridge at a garage sale on a Saturday.</p> <p>But who benefits from the decrease in cash? Electronic payments are convenient for consumers, but is there a downside?</p> <p>Mark McCrindle, a social researcher with his own consultancy, McCrindle Research, says the convenience can come at a cost as "out of sight is out of mind".</p> <p>"It is all around us, with tollway e-tags, for example, where there is a bip but most people are not aware of how much they are paying," he says.</p> <p>"There's not that 'point of pain' of paying with cash that has a psychological impact of making us aware that we are now poorer having made that transaction."</p> <p style="text-align: center;"><img width="498" height="245" src="https://oversixtydev.blob.core.windows.net/media/37282/image__498x245.jpg" alt="Image_ (318)"/></p> <p><strong>Game of phones</strong></p> <p>The major drawcard for contactless payments is convenience, including the ability to use a credit or debit card for small amounts and the efficiency of the transaction.</p> <p>With Visa payWave and MasterCard PayPass, consumers can 'tap and go' for everyday transactions, up to $100 a time, without the need to enter a PIN or sign a receipt.</p> <p>Smartphones are the next frontier in contactless payments with the big tech companies coming out with apps that allow payments without even require opening the app or unlocking the device.</p> <p>Australia is one of the leading countries in the world for smartphone uptake, with more than four out of five people owning a device, according to Deloitte for its Mobile Consumer Survey in 2016. That's up from up from three out of four in 2014. ​Seventy per cent of New Zealanders have smartphone, according to Research NZ survey in 2015.</p> <p>Elizabeth Barry, 26 from Sydney's Zetland, uses CommBank's contactless app, which has replaced its earlier app, Kaching, for everyday transactions.</p> <p>"I use my phone for pretty much all of my smaller payments like grocery shopping. I find it more convenient taking my phone out than taking a card out," Barry says.</p> <p>Barry has a Samsung phone and she can put a short-cut on the phone screen but she prefers to log-in to make sure that she is making the payment correctly.</p> <p>"It's all really easy – I don't remember the last time I logged-on for internet banking," she says.</p> <p>A senior writer with comparison site Finder, Barry doesn't shop too much online and when she does she prefers to use PayPal if it is available, because it's easy and PayPal will refund her money if something goes wrong.</p> <p><strong>Cash not dead</strong></p> <p>However, not everyone is a winner from the shift. It is having a detrimental effect on waiters' tips and charities that solicit cash donations from passers-by on the streets. </p> <p>According to a survey of 2000 people, commissioned by ME Bank, those who pay with a card or smartphone are less likely to pay tips to waiters or to donate to a charity in the street.</p> <p>Nic Emery, the ME head of deposits and transactional banking, says the move to digital money also excludes people who do not have a bank account, which sometimes includes the poorest people.</p> <p>Though use of cash is slowing, cash is not dead. In fact, it's going to remain part of the Australian economy and the payment system for the foreseeable future, says the Reserve Bank in its December 2016 Quarter Bulletin.</p> <p>The Reserve Bank's Consumer Use Survey of 2013, the latest available, found that about one in 10 respondents said they make all of their in-person payments with cash.</p> <p>And cash remains an important store of value.</p> <p>About three out of four people told the survey they held cash in places other than their "wallets". Following day-to-day transactions, the next most-cited reason for storing cash was to cover emergencies. </p> <p>McCrindle says tapping a smartphone connected to a credit card tends to loosen people's natural restraint.</p> <p>He points out that the ratio of household debt to income is the highest it's ever been, and the January crunch from Christmas spending is now happening year round.</p> <p>"It's going beyond the budget and living in a financial fog, tapping here there and everywhere, making it harder to manage money," he says. </p> <p style="text-align: center;"><img width="498" height="245" src="https://oversixtydev.blob.core.windows.net/media/37283/image__498x245.jpg" alt="Image_ (319)"/></p> <p><strong>Which app?</strong></p> <p>Tech experts predict digital "wallets" will soon be used not only in place of cash, but for paying for all sorts of things such as travel tickets and passes.</p> <p>Tech companies are seeking to strike deals with as many banks, card providers, retail chains and big providers of services as possible.</p> <p>Apple Pay app is probably the market leader, though it is the only app that works with the iPhone's "near-field communications", which communicates with payment terminals, says Alex Kidman, tech expert at Finder.</p> <p>It allows payments on an iPhone, Apple Watch, iPad or Mac using Visa, MasterCard and American Express debit and credit cards.</p> <p>ANZ has entered into a deal with Apple to use Apple Pay, as has several smaller banks and credit unions.</p> <p>Android Pay is probably the next most popular. It can be used by any smartphone using the Android operating system - such as popular Samsung, HTC and Google models - and works with those financial institutions who support it.</p> <p>Android Pay supports MasterCard, Visa and American Express credit and debit cards.</p> <p>Android Pay can be used on an ever-growing number of Australian stores, including 7-11, Coles, McDonald's and some government agencies.</p> <p><strong>Security</strong></p> <p>Trying to remember passwords is becoming a frustration of the past as biometric scanning gains traction.</p> <p>Technology that involves our own money is always something that's likely to make us nervous, but the reality is that smartphones can be significantly more secure, Kidman says.</p> <p>Most mobile payment systems will allow you to use a PIN if that's your desire, but payment by smartphone-apps like Apple Pay, Android Pay and Samsung Pay offer an additional level of security, provided your device is protected with fingerprint scanning.</p> <p>These use your fingerprint to pre-enrol onto the device as an additional layer of  authentication. Kidman says even if your phone is lost or stolen, thieves can't use it for contactless payments.</p> <p>"Your fingerprint data is stored securely on the device itself, so there are no worries about your biometric data being stored or illicitly accessed online," he says.</p> <p>Smartphone payment systems work like PayPal in that the details of your card do not go to the retailer. Instead, a one-time token is generated for each purchase.</p> <p>What are your thoughts on a move to a cashless society?</p> <p><em>Written by John Collett. First appeared on <a href="http://www.stuff.co.nz/"><strong><span style="text-decoration: underline;">Stuff.co.nz</span></strong></a>. </em></p>

Money & Banking

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Wiggling your card can protect you from ATM skimmers

<p>As scammers become increasingly sophisticated, a technology expert has outlined an odd but effective way to protect your money when withdrawing from an ATM.</p> <p>In a report from <a href="http://au.pcmag.com/" target="_blank"><span style="text-decoration: underline;"><em><strong>PC magazine</strong></em></span></a>, Kaspersky Lab security researcher Stefan Tanase suggested the best way to protect yourself from card skimmer’s who grab data off your card’s magnetic strip, is by wiggling it as you insert it into the ATM.</p> <p>Tanase says wiggling your card as you insert it into the reader prevents the skimmer from being able to read the card’s data correctly, which can potentially save you a bundle.</p> <p>Tanase also suggests wiggling the whole machine (ever-so-slightly) to see if you can discern any signs of tampering or foul play before you make an initial withdrawal.</p> <p>Tanase adds, “If you don't notice a card skimmer and your card data does get stolen, take heart. As long as you report the theft to your card issuer (for credit cards) or bank (where you have your account) as soon as possible, you will not be held liable for the lost amount and your money will be returned. Business customers, on the other hand, don't have the same legal protection and may have a harder time getting the money back.</p> <p>“Just remember: If something doesn't feel right about an ATM, don't use it.”</p> <p>Have you ever fallen foul of card skimmers?</p>

Money & Banking

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Fraudsters hiding tiny cameras hidden at ATMs

<p>This ATM appears to be like every other ATM but it has been tampered with by fraudsters. A small pinhead-sized hole in the casing shows the tiny camera that has been inserted into the ATM.</p> <p><em><img width="498" height="315" src="https://oversixtydev.blob.core.windows.net/media/34294/london-atm-2_498x315.jpg" alt="London ATM 2"/></em></p> <p>The London ATM was discovered by police investigating cashpoint tampering who found a tiny hole near the cash dispenser. This tiny camera records ATM users putting in their pin number.</p> <p>This ATM in St Paul’s Churchyard, is just one of the several tampered ATMs that have been discovered in the last month. At the beginning of the month, Police found an ATM where the camera hole was placed in the plastic above the keypad. Behind the plastic were mini-recording devices which could also easily record pin numbers.</p> <p style="text-align: center;"><img width="496" height="185" src="https://oversixtydev.blob.core.windows.net/media/34295/london-atm-3_496x185.jpg" alt="London Atm 3"/></p> <p>Police are publishing the photos to show the public just how subtle these cameras are to the untrained eye.</p> <p>PC Matt Clarke, from the City of London Police Crime Squad, said, "If you spot anything unusual about a cash machine, or if there are signs of tampering, don’t use it. If in doubt, try and use a machine inside a branch.”</p> <p>Have you ever seen an ATM that had been tampered with? Let us know in the comments below?</p> <p><em>Image credit: City of London Police</em></p>

Money & Banking

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5 ways to protect yourself from ATM fraud

<p>Nothing quite ruins a day like realising you’ve become the victim of ATM fraud. Scammers claim <a href="/news/news/2016/04/5-signs-your-atm-has-been-tampered-with/" target="_blank"><strong><span style="text-decoration: underline;">millions of dollars every year</span></strong></a>, often because people aren’t vigilant enough.</p> <p>Here are five simple measures you can take to protect your money.</p> <p><strong>1. Be on the lookout for spy cameras</strong></p> <p>Most ATM scams consist of two parts, one that steals data from your card and the other that obtains your pin number, often through the use of hidden camera. If you notice any objects in and around the ATM that seem a little out of place, treat them with caution.</p> <p>The prevalence of hidden cameras means you must always cover your hand when entering your pin. If you think there’s one around it may be best to withdraw elsewhere.</p> <p><strong>2. Be aware of signs of shoddy workmanship</strong></p> <p>Banks are generally pretty good with the maintenance and upkeep of their ATMs so if you see any signs of shoddy workmanship including off-colour plastic or inconsistent details, it could be a sign that this particular machine has become compromised.</p> <p>Before inserting your card have a quick look around the machine for anything that feels a little off colour. If it doesn’t seem right it’s best to take your card somewhere else.</p> <p><strong>3. Keep your eye on suspicious characters around the ATM</strong></p> <p>Often fraudsters are not working alone, so if you’re withdrawing from an ATM you’re not familiar with be on the lookout for any suspicious characters lurking around. They may be in cahoots with the fraudsters who are looking to swipe your personal details.</p> <p><strong>4. Pay attention to the card slot</strong></p> <p>If anything seems a little odd about the card slot of the ATM, such as an irregular protrusion or inconsistent design it’s important to be wary of this. Fake card readers are often installed over the original slot of regular ATMs to capture your private information.</p> <p><strong>5. Pay attention to how the PIN pad feels</strong></p> <p>If the PIN pad feels loose, thick or spongey that’s not a good sign. Many fraudsters use a pin-pad overlay technique to capture and record people’s personal details. As with some of the other steps in the list if it doesn’t feel right you’re best going to another ATM.</p> <p>Have you ever fallen victim to an ATM scam, or know someone who has? Do you think you’re going to start following our tips when you withdraw money?</p> <p>Let us know in the comments.</p> <p><strong>Related links:</strong></p> <p><a href="/finance/money-banking/2016/07/how-to-pick-the-quickest-line-at-your-supermarket/"><span style="text-decoration: underline;"><em><strong>How to pick the quickest line at your supermarket</strong></em></span></a></p> <p><a href="/finance/money-banking/2016/07/10-simple-tips-for-fuel-efficient-driving/"><span style="text-decoration: underline;"><em><strong>10 simple tips for fuel efficient driving</strong></em></span></a></p> <p><a href="/finance/money-banking/2016/06/10-foods-you-must-stop-buying-at-the-supermarket/"><span style="text-decoration: underline;"><em><strong>10 foods you must stop buying at the supermarket</strong></em></span></a></p>

Money & Banking

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5 tips to safely use ATMs abroad

<p>If you’re on a holiday and looking for euros, pounds, yen or even peso, using an ATM can be one of the quickest, most-convenient ways to access your cash. We’re going to take you through our top tip for using ATMs overseas, so you can be confident you will be securely accessing your money.</p> <p><strong>1. Know what you balance is and check it regularly</strong></p> <p>Sometimes people only realise they’ve been scammed when it’s far too late. It’s important to make sure you’re aware of your bank balance at all times, and monitor it regularly for suspicious activity.</p> <p><strong>2. Try to minimise the time you spend at an ATM</strong></p> <p>Lingering around ATMs can leave you open to scams and theft. Before approaching a foreign ATM, work out exactly how much money you want to withdraw and then spend as little time at the machine as possible – but also be sure not to rush and forget anything. If the machine is too confusing, find another one. Lingering too long at an ATM can potentially expose yourself as a tourist to scammers or thieves.</p> <p><strong>3. Avoid non-bank ATMs</strong></p> <p>Independent ATMs are not only more susceptible to fraudsters, they’re also likely to charge exorbitant fees for accessing your money. Try to avoid these non-bank ATMs wherever possible and only access your money from the major outlets.</p> <p><strong>4. Withdraw during bank hours near banks</strong></p> <p>Plan ahead and withdraw larger amounts of cash during day hours. Not only will the bank staff be working and on hand to assist you if anything goes wrong, you’re far less likely to be approached by assailants while you’re during daylight hours.</p> <p><strong>5. If something seems wrong, don’t panic</strong></p> <p>There could be any number of reasons why you can’t withdraw cash from a particular ATM, so if you’re having troubles don’t panic straight away. Sometimes the issue could be simpler than you think. Monitor your balance and try another ATM.</p> <p>Have you ever used an ATM overseas? Did you run into any problems, or was it a seamless process? What advice would you give? Share your thoughts in the comments.</p> <p><strong>Related links:</strong></p> <p><a href="/travel/travel-tips/2016/06/5-international-cities-you-should-never-visit-alone/"><strong><em><span style="text-decoration: underline;">5 international cities you should never visit alone</span></em></strong></a></p> <p><a href="/travel/travel-tips/2016/06/mastering-the-art-of-bartering/"><span style="text-decoration: underline;"><strong><em>Mastering the art of bartering</em></strong></span></a></p> <p><a href="/travel/travel-tips/2016/06/23-items-you-must-have-in-your-carry-on-luggage/"><span style="text-decoration: underline;"><em><strong>23 items you must have in your carry-on luggage</strong></em></span></a></p>

International Travel

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5 signs your ATM has been tampered with

<p>It’s the stuff of every card owner’s nightmares, but the grim reality is millions of dollars are skimmed from ATMs by fraudsters around the world every year.</p> <p>Here are five signs the ATM you’re using has been tampered with.</p> <p><strong>1. ATM has a “false front”</strong></p> <p>While more prevalent overseas, criminals are becoming increasingly adept and placing card or cash capture devices on ATMs, sometimes even installing “false fronts” onto existing machines. Look for obvious signs like shoddy workmanship.</p> <p><strong>2. The card insert slot is unusually bulky</strong></p> <p>Sometimes this suggests the presence of a skimmer, which is a device that can be attached to an ATM to secretly swipe card details while you’re making a withdrawal. Misaligned, misprinted stickers and inconsistent logos are generally an indicator.  </p> <p><strong>3. Loose or blocked card slot</strong></p> <p>Take a quick look at the card slot before you put your card in. If it’s loose or somewhat blocked there may be a tiny device or sleeve with a barb that catches your ATM in the machine, but prevents the machine from reading your card. You think it’s been swallowed, leave and in the intervening moment’s fraudsters come and take it.</p> <p><strong>4. The PIN pad feels thick, loose or sponge-like</strong></p> <p>If the PIN pad feels thick, loose or sponge-like it might be a fake. This method of catching people’s information is known as ‘pin-pad overlay’, where the true PIN pad is covered by a counterfeit that captures your details for criminals to use.</p> <p><strong>5. A lot of people are lurking around</strong></p> <p>This one seems simple enough but it’s always important to be mindful of your environment surround the ATM. Even well-meaning strangers offering help may be in cahoots with other fraudsters looking to access your card details.   </p> <p><strong>Related links: </strong></p> <p><span style="text-decoration: underline;"><strong><a href="/lifestyle/family-pets/2015/12/life-lessons-from-grandparents/"><em>Top 10 life lessons kids learn from grandparents</em></a></strong></span></p> <p><span style="text-decoration: underline;"><strong><a href="/lifestyle/family-pets/2015/10/quotes-about-siblings/"><em>9 heart-warming quotes about siblings</em></a></strong></span></p> <p><span style="text-decoration: underline;"><strong><em><a href="/lifestyle/family-pets/2015/09/kids-addicted-to-technology/">How kids have fun today is alarmingly different to the good old days</a></em></strong></span></p>

News

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How to safely use ATMs abroad

<p>The thought of a debit card being skimmed (or worse) eaten up by a foreign ATM is enough to send shivers down the spine of even the most carefree traveller.</p> <p>It’s never been easier to access money abroad, but doing this is not without its risks. We’ve put together a best practice guide for withdrawing cash from ATMs abroad.</p> <p>Follow our advice and you can access your funds without the mini-heart attacks.</p> <p><strong>Cover your pin code</strong></p> <p>This one goes without saying (and you should really be doing it when you withdraw cash at home). By covering your pin code as you enter it you protect your account from anyone who might be watching your transaction a little too closely.</p> <p><strong>Be mindful of your surroundings</strong></p> <p>Make sure you’re paying attention to the surroundings of the particular ATM you’re withdrawing from. Go with your gut, and if something feels a little bit amiss there’s every chance that’s because it actually is.</p> <p><strong>Withdraw during the day, close to a branch</strong></p> <p>Don’t take your chances when you’re taking cash out. By withdrawing during the day at an ATM that is close to a branch you can ensure that if something does go wrong (like a hungry, card-eating ATM) you can go inside for immediate assistance.</p> <p><strong>Be aware of your balance</strong></p> <p>Sometimes your card might’ve been skimmed and you might not even know it. By being aware of your balance and checking it regularly you can know straight away if a few hundred dollars here or there has gone missing and you need assistance.</p> <p><strong>Additional tips</strong></p> <ul> <li>Notify your bank/card provider before you travel. They can track your funds.</li> <li>Try to lock in a foreign currency when the exchange rate is strong.</li> <li>Carry multiple cards in different parts of your luggage to avoid pickpockets.</li> <li>Inform your bank/insurer as soon as you notice something wrong.</li> </ul> <p><strong><em>No matter where you’re travelling to, making sure you know how to access your cash while away – and in the most affordable way – is very important. Easy to use and with countless benefits, the Over60 Cash Passport allows you to securely access your cash in the same way you use an ATM or credit card. <span style="text-decoration: underline;"><a href="/%20https:/oversixty.cashpassport.com.au">To apply for a card today, click here.</a></span></em></strong></p> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/travel/international-travel/2015/12/7-iconic-public-transport-experiences/">7 of the world’s best iconic public transport experiences</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/travel/international-travel/2015/12/top-10-amazing-festivals/">10 most amazing festivals in the world</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/travel/international-travel/2015/12/shibuya-pedestrian-crossing-japan/">The busiest pedestrian crossing in the world</a></strong></em></span></p>

Travel Tips

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The story behind the world’s first ATM

<p>Of all the baths that have been taken in the history of the world, few have had the effect on our spending habits as the one taken by John Shepherd-Barron in the sixties.</p> <p>It is said that during this particularly inspired soak Mr Shephard-Barron had a moment of inspiration when he thought to himself – well, if vending machines have the ability to dispense chocolate bars, why couldn’t they dispense my cash?</p> <p>Mr Shephard-Barron pitched the idea for his machine to Barclays, a London bank, who absolutely loved it and the first model was installed at a Barclays’ London outlet in 1967.</p> <p>Although, it should be noted that the first ATM was quite different to the ones we know and recognise today. The first ATM used cheques that were impregnated with a radioactive isotope carbon 14 to initiate a withdrawal, as the original machines predated the use of magnetic coding for modern ATM cards.</p> <p>Oh yes, and another difference, the original ATM didn’t charge a fee to withdraw your money - now wouldn't that be nice!</p> <p>Mr Shepherd-Barron also thought up the idea for a personal identification number or PIN, which was revised by his wife Caroline who changed the original idea of a six digit identification number to four digits as it would be easier number for someone to remember off the top of their head.</p> <p>But perhaps the most startling thing about the whole story is that Mr Shephard-Barron never patented his invention, decided instead to try and keep it a trade secret.</p> <p>It is said that Mr Shephard-Barron was concerned after consulting with lawyers that, “applying for a patent would have involved disclosing the coding system, which in turn would have enabled criminals to work the code out.”</p> <p>Mr Shepard-Barron would eventually be awarded an OBE in 2005 for his efforts.</p> <p>Today there are millions of ATMs spread around the world, and while their use has admittedly declined somewhat over the years as people increasingly adopt credit cards and other contactless paying methods<a href="/finance/money-banking/2015/11/is-australia-becoming-cashless/"></a> as their main transaction tools, ATM machines still remain an important part of modern society and a luxury that we perhaps take for granted sometimes.</p> <p>So the next time you’re withdrawing some cash from your local ATM, spare a thought for Mr Shephard-Barron who’s moment of inspiration (and cleanliness) would forever change the way modern society accessed, used and understood the movement of money.</p> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><em><a href="http://www.oversixty.co.nz/finance/money-banking/2016/01/facing-up-to-why-we-fail-with-money/"><strong>Excuses, excuses! Facing up to why we fail with money</strong></a></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/finance/money-banking/2016/01/10-important-quotes-about-money/">10 quotes that show money isn’t everything</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/finance/money-banking/2015/12/10-apps-to-help-you-budget-this-year/">10 apps to help you budget this year</a></strong></em></span></p>

Money & Banking

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Will cash be dead in a decade?

<p>Despite the fact that Australians withdraw over $11 billion from ATMs every month, new research shows that we are heading for a completely cashless society within the next 10 years.</p> <p>With phone and tablet transactions becoming more of an everyday occurrence, the days of saving your coins in your piggy bank could be numbered.</p> <p>The <em>International Journal of Electronic Business</em> states that the global economy is moving towards a completely cash free phase due to the amount of financial transactions being carried out using mobile electronic devices. It’s believed that this will continue to grow, leading to an eventual death for “real money” as we know it.</p> <p>Australia is a nation with over 50 million payment cards amongst 23 million people. Already, 82 per cent of Australian payments are made in non-cash dollars.</p> <p>Bjorn Behrendt from Mint Payments Limited says that rather being a shock, it is actually a necessary evolution that offers daily benefits.</p> <p>“Many Australians are still very wary of relinquishing cash control. However what needs to be noted is the various ways this payment evolution will improve our lives,” he said.</p> <p>Mr Behrendt outlines the four main benefits of our future cashless society:</p> <p><strong>Speed –</strong> A contactless card transaction can occur much faster than handing over cash.</p> <p><strong>Safety –</strong> No need to carry large amounts of cash around when you can have your money securely stored on your card and protected by a pin number.</p> <p><strong>Convenience –</strong> We tend to always have our mobile phones with us, which means you no longer have to remember to take your wallet everywhere you go. Plus, the lines at the store will be shorter which makes everyone happy.</p> <p><strong>Price –</strong> The cost for printing money and minting coins is paid for through your taxes, so cutting out the need for cash means your tax dollars can be used for other things that could benefit you in various ways.</p> <p><strong>Related links: </strong></p> <p><span style="text-decoration: underline;"><em><strong><a href="/news/news/2015/07/most-expensive-cities-for-hotel-stay/">The 10 most expensive cities in which to book a hotel room</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/news/news/2015/07/sugary-drinks-linked-to-deaths/">Sugary drinks have been linked to over 184,000 deaths each year</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><a href="/news/news/2015/07/new-silent-bubble-wrap/"><strong>Popping bubble wrap will soon be a thing of the past</strong></a></em></span></p>

News

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ATM fees are finally being investigated

<p>You need cash out and your bank’s ATM is nowhere to be found. You withdraw your money and reluctantly pay the extra charge. But is it fair that you have to pay a fee to withdraw cash from another bank’s ATM?</p> <p>This is the very issue that Labor’s Sam Dastyari and the Greens’ Peter Whish-Wilson have asked the Senate to investigate.</p> <p>In the financial year up to July 2014, Aussies were slugged with around $630 million in fees for “other ATM use”. In some areas, particularly rural places, where access to ATMs is limited, the fees are even higher than the standard $2; as well as in petrol stations or non-bank ATMs.</p> <p>The case that Labor and the Greens want the Senate to investigate is that:</p> <ul> <li>the fees are regressive as they affect those with small amounts of money in their account more than the wealthy.</li> <li>the fees don’t reflect the true cost of providing the service; and</li> <li>the fees greatly affect people in rural Australia as banks are closing and their nearest ATM may be far away.</li> </ul> <p>When ATMs were introduced 30 years ago the banks believed they could save money on wages as it would reduce foot traffic into branches. But customers were so enthusiastic about ATM use that the banks found it was adding to their costs rather than reducing them. Australia, in particular, has one of the highest take-ups of mobile banking in the world.</p> <p>The banks are already displeased about Senator Dastyari’s call for an inquiry into credit card interest rates, but it’s the ATM fees that affect more people, more often.</p> <p><span style="text-decoration: underline;"><strong>Related links:</strong></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/news/news/2015/06/new-atms-to-combat-fraud/">New tap-and-go ATMs aim to combat skimming fraud</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/finance/money/2015/05/hidden-cost-of-things/">7 things with hidden costs</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="/finance/money/2015/04/avoid-atm-fees/">Aussies hit with exorbitant ATM charges. Find out how to avoid them</a></strong></em></span></p> <p> </p>

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