Kevin Laliberte
Editor, Smoky River Express

Here’s a figure I’ll throw out to readers this week... $450 million. That’s how much big credit card companies have stuck Canadians with in hidden fees since the launch of a new web site on Sept. 3, 2008, believe it or not. And if you think that’s bad, then get this. Canadian consumers paid over $4.5 billion in hidden credit card fees last year alone – fees we all pay at the checkout to cover the cost of lavish incentive programs and corporate credit card benefits, even if you don’t have one! Don’t despair though because help is on the way. It comes in the form of the Stop Sticking It To Us Coalition – a group of Canadian associations led by the Retail Council of Canada and backed by over 120,000 businesses from coast-to-coast – which is standing up to major credit card companies in an effort to put the brakes on consumer gouging through skyrocketing fees. At the centre of the growing controversy is those so called “interchange fees,” which Visa, MasterCard and our banks which issue their cards collect from merchants every time a credit card is used to pay for a purchase. More than $2 of every $100 Canadians spent goes to Visa, MasterCard and their issuing banks to pay for lavish rewards programs and junk mail, in addition to padding their profits. A $1 transaction and a $100 transaction costs about the same to process, yet the interchange fees are based on a percentage of the total price of the sale. The question is why? Well, the simple reason is that credit card companies like Visa and MasterCard, which I might add control 80 per cent of the credit card market in Canada, are unregulated. In a nutshell, this essentially means they can charge whatever they want without repercussion. Oh, but it gets worse folks because now these companies want to raise these skyrocketing hidden fees ever further. Under the plan, you’ll pay more, as will your local retailer. The only ones getting rich are the ‘Big Credit Card’ companies, whose only agenda is to squeeze as much money as possible out of us as so-called valued clients. For the record, this modern-day form of predatory pricing isn’t going unnoticed. Dozens of countries around the world for example, including the U.S., Australia, Colombia, Hungary, Romania and Spain, are investigating the big credit card companies’ fee practices. A U.S. House Committee has even tabled legislation to regulate these fees. It’s up to us as Canadians to ensure our government follows suit by doing the same. One government party to stand up and take notice of the situation is the New Democratic Party and leader Jack Layton. “Every day, Canadians are paying millions of dollars due to price-gouging and hidden fees of all kinds,” Layton said. “It’s wrong and it’s got to stop.” He said an NDP government would crack down on the “epidemic of hidden fees and price gouging (including fuel prices),” adding these practices are contributing to the income squeeze on working and middle-class families. The coalition, meanwhile, says it will be actively involved in the proposed re-structuring of Interac, which has applied to the Competition Bureau to re-structure and join the big credit card companies in charging higher fees. It’s up to us as consumers to join the fight by making it crystal clear to our next Member of Parliament that the days of sticking it to us and an unregulated system are indeed over!

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