Canadians like their banks but resent the service fees

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 PCFinancial 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 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.

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 No. 1.

The Throne Speech also promised to ban fees for getting a paper copy of bills, an issue raised in a briefing to Finance Minister Jim Flaherty.