The Post Office and ATM supplier Hanco are working to resolve the misunderstanding over fees for supplying cash to free-to-use machines (Convenience Store, May 15).

All branches that installed ATMs following a 2006 agreement to put free machines in deprived areas recently received a bill for two years' worth of charges - equivalent to 23p for every £100 dispensed - which the PO had omitted to collect.

Tajinder Singh of Parkfield Post Office in Wolverhampton told Convenience Store that he had been billed for £5,000 in back payments. "I'm shocked it's taken them two years to tell me this - it will cause horrendous cash-flow problems," he said.

However, he said the PO was taking less than the full amount due and would take the repayments over two years.

"If I'd known there was a charge for using their cash I would have used my own," he said. "I'm stuck because I signed the contract, but as I had about 50 papers to fill in, it's no surprise I missed the detail."

Machine operator Hanco said that it had made regular payments of 11p per transaction to the subpostmasters, but would make up any difference between this and the amount due. "If the amount being claimed by Post Office Ltd is greater than the amount we have paid retailers to date, we will reimburse any shortfall," said a Hanco spokeswoman. "However, this is likely to occur in very few cases."

A Post Office spokesman said it was examining options to resolve the situation fairly.