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Credit card fees facing scrutiny

IDNUMBER 200901310051
PUBLICATION: Waterloo Region Record
DATE: 2009.01.31
SECTION: Business
BYLINE: Gary Norris
SOURCE: The Canadian Press
COPYRIGHT: © 2009 Torstar Corporation

Credit card fees facing scrutiny

Calls are rising for government action to scrutinize and control fees charged on credit cards.

The Retail Council of Canada said yesterday the system "is failing many Canadians,'' while the Canadian Community Reinvestment Coalition accused the federal Conservatives of "negligence'' in bank regulation.

"At a time when many Canadians are struggling and businesses are challenged to decrease costs while still providing value to their customers, the fees charged by credit card companies and the banks that issue their cards are increasing,'' stated Diane Brisebois, president of the Retail Council, representing more than 40,000 store operators.

The merchants' group endorsed Senator Pierrette Ringuette's call for an investigation by the upper house's committee on banking, trade and commerce.

There were signs that bankers have heard the clamour, as TD Bank promised yesterday there will be "no new fees and no fee increases'' for the rest of 2009 on credit cards and other personal and small-business products. TD also aborted a $35 fee it was planning for inactive lines of credit.

"We've been listening to the concerns our customers and employees have been expressing, and we believe that this commitment is the right response in the current environment,'' stated Tim Hockey, president of TD Canada Trust.

But the retailers' group says existing card fees include an enormous hidden cost for average Canadians, amounting to $4.5 billion or more annually.

Cardholders also face a forbidding tangle of charges: the Retail Council says 55 per cent of Canadians have a poor understanding of card fees, according to a recent poll it commissioned.