Dear RBC: What a Rotten Idea…

According to PIAC, we already pay over $700 million in paper statement fees in North America. And, since it’s summer again, it’s the bi-annual increase in service charges. Global Television had a big story on the Royal leading the way with their 18 million customers.

Have we just become numb to this, shrug our shoulders, and take it…twice a year? That’d be sad, but I have a hunch that that’s the case. The nastiest change by the Royal is that the seniors fee plans are changing from age 60 to 65. Great if you’re a shareholder because you get to rip off millions of seniors for another five years. That’s 60 more months of full service charges! The story featured one lady who has set up an appointment at her branch to see if she can get some fees waived. Sorry, lady – you’re wasting your time. The quote from the Royal was “we’re working hard to keep costs down.” That’s funnier than any comedy show you’ll watch this year.

What’s the behind the scenes reasoning for this one? We Canadians are slowing our borrowing down a bit. Maybe not by choice, but because we’re pretty maxed out. It’s also the result of a slower economy. Do you think banks are just going to see their income drop from interest income and not replace it somewhere else? The Royal already makes $1.5 billion in account service charges (2014). That’s 5% of all their income! Want to bet it’ll hit $2 billion this year if you don’t go somewhere else?

Why can the banks do this? Because they’ve made millions of you really sticky. That’s a bank phrase that they focus on a lot. When  you’re stuck – you don’t move elsewhere. If you have five dealings with a bank you’re so stuck, you’re not moving. A chequing account, direct payroll deposit, some RRSPs, a credit card, maybe a line of credit, and a mortgage, and they’ll likely have you forever! Then you’ll pay the increasing service charges, whatever fees they dream up, and take whatever bad service (if any) that you can get.

You’ll complain and moan. but you ain’t moving to a credit union. Your perception is that it’s too hard to move everything. It’s not! Get to a credit union TODAY. Open a chequing account and change your direct deposit. That’s the big step: Where your income is going. Then move your auto payments and you’re set. Oh, and while you’re there open up a Choice Rewards MasterCard, low-rate, or student card. No fees, no hassle, better and more flexible rewards, getting treated like an owner (because you are), and you’re never going to be charged a fee to enter a branch, or to pay your own payments down the road. It takes an hour of pain to move things around…for a lifetime of being valued for your business AND a rebate the end of year on all your dealings! My service charged went DOWN this month AND I got over $600 back in my annual profit sharing! As Nike says: Just Do It! Enough is enough! The government isn’t coming to help you here – so repeat after me: If it is to be – it’s up to me!

But part two is even nastier. The Royal announced they were thinking of charging their customers to pay their own Royal Visa payments, their loan payments, and mortgages. Yes, you heard that right. A service charge to pay payments for their own loans and credit cards. Last Friday they backed off. But you have to know this will come up again. How sick, sad, and just wrong!

The Federal Government has a long track record of not being big on helping consumers. They did force cell carriers to discontinue their paper statement fee. Yet they aren’t shutting down the banks from these rip-off fees that are probably a hundred times more than the little cell carriers and impact millions more people. Is it because Bay Street and the big no-service banks are some of the biggest contributors? You decide…

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