TORONTO – While Canadians are generally satisfied with the overall quality of service from the country’s six largest banks, rising service charges and fees are causing resentment among customers, according to a recent poll.
The Ipsos-Reid survey, done for the Financial Consumer Agency of Canada, found that one in two chequing account holders believe their monthly service charge is high or very high.
On Wednesday, the federal government highlighted the issue in its Throne Speech, pledging that it will slash bank fees.
“Banking fees have increased over the years and this has caused some resentments towards the big six banks, especially hearing the big six banks are making record profits,” said the survey, which was completed in March but only recently posted on a government website.
But the grumbling doesn’t mean many people are turning to financial institutions such as PC Financial and ING Direct, which allow clients to open a chequing or savings account with no monthly service charges.
“Despite offering Canadians a strong value proposition, only five per cent of households in Canada have a main financial institution relationship with PCF or ING Direct,” the report said.
“Much of this is due to the lack of a branch network which can be viewed by some as an obstacle.”
The survey found only one in five chequing or savings account holders recently opened a new account in order to replace an existing one. Most of those who switched did so because they moved, but others changed banks to take advantage of reduced service charges.
High service charges was the most common reason given for those thinking about switching.
Canadians pay less than $10 per month on service charges for their chequing accounts, the poll said. Most people don’t exceed the monthly transaction limits set by their accounts but those who do, pay between $2 and $5 extra per month.
The Ipsos Reid survey did find that few customers took advantage of low-cost chequing accounts offered by their banks. Customers surveyed said they saw no need for it, were happy with their current account, or weren’t aware that it was an option.
Six out of 10 Canadians said they were satisfied overall with their banking experiences.
Among the big banks, TD stood out when it came to customer satisfaction, and was rated number one in terms of convenient locations and hours of operation.
The Throne Speech also promised to ban extra fees for getting a paper copy of a bills, an issue raised in a briefing note to Finance Minister Jim Flaherty in July.
The note, obtained under the Access to Information Act, said the working poor and seniors may be adversely affected by such fees charged by banks because seniors, for example, generally have low digital access or literacy and preferred printed statements.
No details were provided on how the government plans to proceed with its pledges.
The poll was based on a national telephone survey with a sample of 1,000 households conducted between March 13 and 21, with a response rate of 58 per cent. The overall sample of 1,000 respondents has a percentage point margin of error of +/- 3.2 calculated at 95 per cent confidence interval.
The top six banks in Canada for the purposes of the poll were Royal Bank (TSX:RY), TD Canada Trust (TSX:TD), CIBC (TSX:CM), Bank of Montreal (TSX:BMO), Scotiabank (TSX:BNS), National Bank of Canada (TSX:NA), PC Financial, and ING Direct.