Bank charges – Consumers poorly informed
April 11, 2018 – According to a report released by Option consommateurs today, most Canadian financial institutions do not adequately inform consumers about the charges associated with their banking packages. According to Olivier Bourgeois, energy and social responsibility coordinator at Option consommateurs:
“this lack of information prevents consumers from making informed choices and adopting banking habits that would permit them to save.”
This conclusion was drawn from the results of a study Option consommateurs conducted in Montreal and Toronto. Its researchers visited 27 branches of the country’s largest financial institutions and analyzed the website content and pamphlets of 18 financial institutions. “Our research revealed that the representatives of financial institutions do not use all the tools at their disposal to properly inform consumers,” said Olivier Bourgeois, who authored the report.
The study also demonstrates that the financial institutions, which are signatories to a public commitment to offer low-cost accounts, are not respecting their commitment to disclose information inside the branches. “The Low-Cost Account Guidelines issued by Finance Canada are clear with regard to disclosing information to the customers of financial institutions,” Bourgeois said.
During its study, Option consommateurs also conducted interviews with 100 low-income Canadians. These consumers were unable to properly assess the charges associated with their banking services; they underestimated the amounts charged to their accounts by almost 50%. According to Bourgeois: “the way packages are designed and explained to consumers makes it easy for variable fees to skyrocket, even for those with low-cost accounts.”
Option consommateurs recommends that financial institutions improve the training of their customer service representatives. It also asks the Compliance Department of the Financial Consumer Agency of Canada (FCAC) to take the necessary steps to ensure compliance with the guidelines issued by Finance Canada for financial institutions that have publicly committed to offering low-cost accounts. Finally, it recommends that consumers seek out information from several financial institutions and compare the plans of different institutions to help avoid paying unnecessary bank charges.
The report “Bank charges and low-income consumers: a portrait of the situation” was produced by Option consommateurs thanks to a contribution from Innovation, Science and Economic Development Canada’s Office of Consumer Affairs.
About Option consommateurs
Option consommateurs is a not-for-profit association whose mission is to defend the rights and interests of consumers. It is closely involved in issues related to personal finance, business practices, financial services, protection of personal information, energy, health and agri-food.
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Source: Elise Thériault, Tel.: 514 777-6133