Banking fees are going up at all of Canada's five big banks, but some customers of RBC in particular are outraged about the changes. They're accusing Canada's biggest bank of targeting children and those who can least afford it.
Gordon and Elaine Murray from Glen Margaret, N.S., have been RBC customers for 20 years. It took one envelope in the mail the other day to get them thinking about changing.
Inside that envelope, Elaine Murray found the flyer Royal Bank of Canada recently mailed to many of its 16
million clients outlining the fee changes on the way.
"I couldn't believe it — it just seemed outrageous," she says.
Fee hikes June 1
On June 1, RBC is introducing new or higher fees for a variety of accounts and transactions including debit purchases, mortgage and loan payments and children's accounts.
The bank is also increasing the age eligibility for seniors' rebates from 60 to 65.
Elaine Murray and her husband have several accounts, insurance and a mortgage with RBC. The first thing they noticed is the new fee being added to mortgage payments, on top of the interest already being charged.
'Double-dipping'
"It looked like double-dipping when I saw that we could be paying on top of our interest a fee for making our mortgage payments," Gordon Murray says.
The fee increases may only be a dollar here and there, but he says any additional money being taken from customers is too much, especially from a bank that just announced a record $2.46-billion profit.
"You have a multinational corporation that makes billions of dollars … come to its clients and say, 'and we want more,'" Murray says.
The couple say they are less worried about themselves and more troubled by the fees being added to children's accounts and student loans.
"They were reaching into the pockets of young savers and students — it is just wrong," Gordon Murray says.
Martin Weirich has banked with RBC for more than 15 years, and says the bank is 'very sneaky' in disguising the true cost of loans and mortgages. (CBC)
They're not alone. Across the country in Penticton, B.C., Martin Weirich is also a longtime RBC customer.
"What caught my eye is a lot of the fees that are instituted were zero prior to this notice coming out, and now they are between $1 to $5 for regular payments. Payments like paying your mortgage or paying a loan."
"I think it's an outrageous fee increase for one. I think the bank has now made the cost of their loans and mortgages cost hundreds of dollars more without posting a rate increase, and I think that's very sneaky," Weirich says.
RBC says new fees 'cost of doing business'
"We understand that any change in pricing or fees is a sensitive topic for clients and we work hard to keep costs down," says RBC spokesman Andrew Block.
"On an annual basis, we review our products and services and sometimes adjust the pricing for some of them to reflect the cost of doing business."
Royal Bank of Canada
But Block also says customers will only be charged the additional fees on children's accounts, mortgages and loans if they exceed the number of free debit transactions allowed per month under individual banking plans.
He says the bank is willing to increase the allowable number of debit transactions for children and students if clients ask.
All 5 big banks increasing fees
RBC is just the latest bank to introduce fee changes. All of Canada's biggest banks — Scotiabank, CIBC, TD Bank, BMO and RBC — have recently raised fees or will do so in the coming weeks.
Scott Hannah from the Credit Counselling Society says the increases are small, but they add up.
"I think people in general are being fee'd to death, and not just by financial institutions," Hannah says.
"It seems, a variety of different services, we're hit with any number of fees, and looking at our incomes in Canada we are certainly not keeping up with inflation in many cases," he says.
"There's a sense of frustration, particularly when a person is living very tight to their paycheque."
Scott Hannah, Credit Counselling Society (CBC)
Hannah says low lending rates are contributing to the banks' moves to increase fees.
"I think the banks listen to their shareholders, and I think the bank, like all corporations, is looking at how do we maximize returns for shareholders," he says.
His advice? First, talk to your bank about reducing or eliminating certain fees.
If that doesn't work, he says, "It pays to shop around, and with all the information available online, we strongly encourage people to have a hard look to make sure you have the right banking package."
"Otherwise you may find yourself paying perhaps $100 or $200 extra fees each and every year."
Ottawa looked at bank fees
The Financial Consumer Agency of Canada looked at the issue of bank fees in a report that raises questions about how competitive Canada's banking industry is and if it's fair to consumers.
The federal agency looked at service, location and hours, but found Canadians were most dissatisfied with banking fees.
According to the report, the average monthly fee on chequing accounts went up by 13.6 per cent from 2005 to 2013. Not a big increase.
But during the same period, there was a 46 per cent increase in what it calls "variable fees," transactions that exceed or aren't covered by monthly banking plans.
Yet the report had little to say about this.
"While most researchers agree that the banking sector in Canada is highly concentrated, the consensus emerging from the literature is also that its market for financial services is relatively competitive."
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