While eating dinner last night I turned on CBC Marketplace one program I actually enjoy watching on the television here in Canada. If you are not familiar with Marketplace it’s a program that backs Canadians as our consumer watchdog now in it’s 40th year. Marketplace co-host Erica Johnson asked Canadians “Do you have a gripe about Bank Fees?” and busted the big 5 banks. This was great, I almost wanted to break out a bag of Orville Redenbacher, finally someone is speaking up. She says that people feel that banks are “ripping them off”. It’s not surprising when we hear that some Canadians are forking over $50 a month. According to the Canadian Bankers Association spokesperson in the show, “31% of Canadian pay no fees” and the rest, well I’m afraid, you do. When was the last time you sat down and went over all your bank statements to check how much you pay for fees?
Preet Banerjee, an independent Personal Finance Expert and Blogger at WhereDoesAllMyMoneyGo.com voiced his opinion and says, “we are partly to blame because we don’t keep track of all these fees” and I agree. It’s the same with budgeting we need to know where our money is going, how else can we effectively manage it if we don’t? What was interesting was when a money coach was recruited for one Vancouver family and able to help them save almost $1000 in yearly fees. Not surprising to hear she stated they seldom go into a bank to see a teller, “we do alot of it online” questioning why they are paying so many fees. All of these fees add up so unless you want to hire a money coach to sleuth your personal finances, it’s up to you to read the fine print. Greet says, “the fine print is only going to get smaller and the documents bigger when it come to financial services“.
I for one cannot stand bank fees in Canada hence why we continue to bank with President’s Choice Financial where my wife has been for many years. Now, I’m not saying to get rid of the bank tellers, just the opposite because not everyone is computer savvy or not have internet for that matter. What I’m saying is make the banking experience a cost-effective, realistic experience for Canadians and stop gouging us for money when clearly the banks are not hurting for profits. One person on the streets of Toronto stated, “why do I have to pay to take out my own money?”. Good point considering the amount of profits they are making using our money, but I guess for now that’s the price we have to pay.
I understand a business needs to make money to survive and last night Erica points out the banks made a whopping 28 Billion dollar profit in 2012 so it’s not like they are hard up for cash. I think it’s time the banks cut Canadians some slack and make banking a bit more budget friendly when it comes to fees and our pocketbooks. Preet says, “6-7% of the banks profits come from bank fees”, no shocker there.
Speaking of Fine Print….
One New Westminister B.C. mother was displeased to find out her once “free banking fees’ that were waived because she kept $1500 in the bank had changed. She was now required to keep $2000 in the bank otherwise a fee of $9.95 would apply. They did inform her though, she needed to read the statement and another reason why it’s so important to read that fine print. According to the Canadian Bankers Association spokesperson banks are required to give 30 days notice of any increases.
Another guy was “thoroughly pissed off” at TD Canada Trust and felt he was “led down the garden path” and I would be too. They failed to tell him outright that his mortgage was a collateral mortgage rather than the conventional mortgage we are all used to. Don’t worry I had no idea what a collateral mortgage was either and neither did most when Marketplace asked on the streets.
A collateral mortgage is one where the piece of real estate is used to secure the loan. TD announced in late 2010 that all new mortgages would be considered collateral mortgages. There are cons to this type of mortgage and according to Canada Mortgage news this type of mortgage cannot be transferred. Best of it is, no other banks will accept a collateral mortgage and neither will TD. You lose your negotiating room when the mortgage matures, just another marketing ploy to try and force you to stay in my opinion. He didn’t find out until getting ready to sign documents the day before closing in the lawyer’s office.
If you think that’s bad enough they go on to talk about Mutual funds and the fees you might be paying for and not even know. I agree with Preet when he says that the banks need to be forthright and transparent. They should be telling us more information about our money, the truly important stuff that they know we need to know and that they would want to know if they were the consumer. We shouldn’t have to pry the answers out of them. Don’t pull the wool over our eyes because you think we won’t know any better, or you think we won’t care because that’s far from the truth.
Should Canadians start reading the “fine print“, you bet, in fact I did just that this morning with a pamphlet that came from a company I receive services from stating their service fees will be increasing. So instead of tossing what you think is “junk” in the garbage when you get your statements, make sure you take a moment to read what they have to say. Make sure with anything you are signing that you read the terms and conditions and don’t feel like you are in a rush to do so especially when it comes to potentially the biggest purchase of your life, a mortgage. Legally, most institutions will do what they have to and make sure the information is in the document even if you need a magnifying glass to find it, but they won’t force you to read it, that’s your call, we can’t say “we didn’t know”.
You can watch the full Marketplace episode here and I encourage you to.
Questions: What are you paying for bank fees? Do you read the fine print?
Chocolate Brownie Cake– YUM! Have a Slice of that my friends (don’t pretend you’re not wanting to lick the screen right now), and check out all the amazing Bloggers that linked up to this awesome site called Canadian Budget Binder. I think I’m going to start creating my own Brownie Cake recipe soon, this looks delicious.
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