Feeling bank heat

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by Craig Segal

Royal Bank customers who are stubbornly holding onto their old no-service-fee accounts received some sad tidings at the end of last month. Like the rest of the overcharged masses, nearly all Royal Bank customers must now pay a service fee for each transaction unless they opt for a flat fee package. Christelle, who answered customers' queries over the holiday weekend, said she received "about 100 calls in two weeks" from customers demanding explanations. Two choleric callers vowed to abandon Royal forevermore.

Duff Conacher, coordinator of Democracy Watch, says bank fees wouldn't be so bad if banks would just admit how much cash they make off them. "Banks say four to seven per cent of total revenue comes from service charges," says Conacher. "The big six banks made a total revenue of $95-billion last year, so that's $6-billion. But the key question is, does it cost them $1-billion to make that $6-billion? If it does, that's a 500 per cent profit."

"Low-income people are penalized in two ways: the service charges and the maintenance fee you pay when you're close to zero," says Adam Gottlieb, who coordinated a local bank alternatives study with the Quebec Public Interest Research Group. "This is an outright punishment for being poor and I think it's absolutely criminal. The main thing that's needed is a people's credit union without service charges."

To learn which bank is easiest on your wallet, go to www.strategis.ic.gc.ca and click "Consumer Information" and then "Financial Service Charges Calculator."