ATM Bank Fees in Canada

Diogenes's picture

Canada's Banks and the cost of being Canadian - Part II

Maybe I shouldn't complain. I don't own any ABCP, or a Blackberry, or even a car or a house. I travel light. But I do have a Canadian bank account. And I have used bank machines around the world.

We live in Holland now (and we ride bikes). We have lived in London, where everything costs more than it should; and we have travelled a bit - India, Equador, Norway, South Africa, Germany, France and more.

In all of these places we almost always succeed in obtaining money from an Automated Teller Machine (ATM) at one of the local banks. This is not a big challenge in most places.

We have not been charged fees by the foreign banks for cash withdrawals. Not in London, Paris, Amsterdam, or New Delhi. But we are always charged a fee by our Canadian bank on any withdrawal made in another country.

Canadian banks are in a league of their own when it comes to service fees on customer accounts. Most foreign bank ATMs do not charge a fee for a cash withdrawal in the host country. Canadian banks always do.

Currency exchange rates in these transactions always benefit the banks, but the charge is nowhere near the larceny of the user fee.

Within Canada, most ATM's will charge you $1.50 for a withdrawal. It can easily be double that. Outside of Canada you can expect the fee to be around $5.

We have a Dutch bank account now, so service fees for ATM withdrawals when we travel are a thing of the past, except in Canada, of course.

Bank machine

Canadian banks have been asked by parliamentary committees about ATM user fees, but the big banks do not feel compelled to disclose that kind of information. This display of arrogance should not come as a big surprise. Our bankers are not afraid of our lawmakers because our bankers think they are the ones who make the laws.

How to tame the Beast

Britain has this government body called the Office of Fair Trade (OFT). Their interest is in investigating price fixing. They offer immunity to those who first come forward with testimony. Be the first to blow the whistle and you stay out of jail and avoid BIG fines.

The next in line is not so lucky.

The power of the OFT and the fines levied for price fixing in Britian and the European Union do serve as a deterrent. The strategy of giving whistle blowers immunity, pioneered by the American courts, has served the OFT well. The whistle blowers are lining up looking for immunity.

Am I suggesting that Canada could benefit from such a program? YES.

And Canada's Banking establishment is a good place to flush out the weasels.