Audrey Williams was more than a little offended to learn that TD Bank fees will increase on June 1.
“I watched [the letter] and I thought, “This is ridiculous,” Williams told Go Public, standing outside his TD branch in Scarborough, Ont. “And then a few days later I looked at him and got angry again.
What really baffled her was when she learned that her long-standing financial institution had continued to generate billions in profits during the pandemic.
“So what is it?” she asked. “It’s just about trying to pull people in when they’re already down. To kick them one more time, harder.”
Williams and other customers at TD, CIBC, Bank of Montreal and Scotiabank recently contacted Go Public about fees that have increased or are about to increase for a range of accounts. , products and services. They all question the timing.
Banks tell Go Public that the increases were made after careful consideration and that other options are available to customers.
But a bank critic says banks are raising fees because no one is stopping them.
“Prime Minister Trudeau said a year ago that banks should do more to help Canadians – and scamming them doesn’t help them,” said Duff Conacher, co-founder of Democracy Watch, a citizens’ group calling for accountability government and corporate responsibility. “It is high time that he and the Minister of Finance intervened.”
Williams says TD’s changes to its preferred checking accounts – the type it has held for over 25 years – are “outrageous and utterly unfair.” The bank increases the minimum balance required to avoid the charge from $ 2,000 to $ 5,000.
“In an environment where people have lost their jobs, they’re on leave, they’re trying to get CERB payments, who’s going to be able to keep $ 5,000 in their bank account so they don’t get service charges?” she asked.
Plus, for customers who don’t maintain the new, higher balance, TD is increasing the transaction fees on these accounts – from $ 1.25 to $ 1.95.
These higher fees will apply to every transaction, including when customers use their debit cards; after that, Williams points out, Canadians were urged to avoid cash transactions in an effort to fight the coronavirus.
TD is also increasing fees for things like overdraft protection on certain chequing accounts and wire transfers.
“It’s quite a shopping cart of money,” Williams said. “You just have to increase to increase to increase. And the only people who are going to suffer are the people who need an overdraft because their CERB does not cover their wages or their rent, their heating and their food.”
Other frustrated TD customers have also contacted Go Public.
“It seems corporate-wise… given the economic ramifications of the pandemic,” wrote one client who said he was receiving fixed income disability benefits.
“People are struggling,” wrote another. “I’m just shocked.”
In a statement to Go Public, spokesperson Fiona Hirst said TD understands fee changes can be a “sensitive issue.”
“We encourage customers with concerns or questions to tell us… about the options available to us,” Hirst said.
Statistics Canada revealed last week that the country’s year-over-year inflation grew at the fastest rate since 2011, rising 3.4%.
Bank fee hikes don’t happen every year and when they do, they’re never popular. Add a pandemic and that discontent seems to grow.
Various increases have also been recently implemented at BMO and Scotiabank, and are scheduled for certain CIBC clients on July 1.
Robert Gerl, a firefighter from Oakville, Ont., Complained to CIBC.
“I was just thinking, especially now, about gall,” he said. “It is beyond comprehension.”
A CIBC spokesperson said in a statement that the bank’s fees “are among the lowest of any major Canadian bank” and that a person from CIBC has reached out to Gerl to discuss ways to help him avoid expenses.
Rising fees during a pandemic prompted longtime BMO economist and client Kisan Gunjal to send a letter to the bank’s ombudsman.
“This is definitely not a good time for banks to raise fees,” said Gunjal, from his home in Milton, Ont. “We have to insert the ethical part.”
In a statement to be made public, a spokesperson for BMO said the bank periodically reviews its plans “and any changes are made after careful consideration.”
Billions of profits
The fee increases come after each of the Big Five banks reported billions in profits for the first quarter of this year, profits that were higher than the same period last year for the five and that exceeded expectations of the analysts. All of the Big Five continued to make billions in profits in 2020, but their reported net incomes were down from 2019, before the pandemic, for all but TD.
All of this is fueling the need for increased surveillance, according to Conacher, the banking critic. His organization has collected nearly 80,000 signatures on a petition urging Ottawa to urge banks to do more to help Canadians during the pandemic.
“The bank is … as essential as heating and electricity to live in today’s society,” he said. “And the government should regulate like it’s an essential service. Which means making sure they serve everyone fairly … and that gouging is banned.”
He points out that even though the big Canadian banks are much smaller than many banks in other countries, four still rank in the top 50 in the world in 2020.
Conacher calls on Ottawa to amend the Bank Act, to require independent audits of each division of banks to determine their profit margins. “And if that’s more than a reasonable 10 to 15 percent profit margin, then banks should be forced to lower their commissions and interest rates to a reasonable level,” he says.
Democracy Watch called on the government to monitor bank profits more closely before, but saw no action.
“Banks can look back and see the finance minister after the finance minister protected the scams … that the banks are doing to millions of Canadians,” he said. “I just guess they think the current finance minister [Chrystia] Freeland and Prime Minister Trudeau will continue to do the same – overturn and do nothing. “
Changing the law could take years. In the meantime, the finance minister could talk to the banks, says Ken Whitehurst, chief executive of the Consumers Council of Canada.
“The minister could wave her stick in the form of having a national conversation … and see if the banks would choose to relax,” he said.
Go Public asked the ministry what it was prepared to do about the fee increases.
A spokeswoman for the finance minister said she could not provide an answer. Instead, the department sent out a statement outlining several initiatives Ottawa has put in place to support Canadians during the pandemic, such as the CERB program and the expansion of EI.
Williams says she thinks the time has come for the government to talk to banks about the hike in their fees.
“Someone has to watch what they’re doing and check them out,” she said. “I am shocked and saddened that they care so little about their customers. That we are just a lot of money to them.”
She has a week to figure out what to do, before the higher TD fees go into effect.