Thursday, February 10, 2011

Greedy Scotiabank, despite tax cuts, gouges customers and drives this fed up customer away

I've been a longtime Scotiabank customer. I switched from CIBC over a decade ago because CIBC refused to allow access to its ATM machines outside working hours at its Carlton/Church location in downtown Toronto at the time due to concerns about homeless people sleeping inside its location at night. I was also impressed that Scotia was the only one of five Canadian banks not to try to merge during the 1990s.

However, my relationship with Scotiabank is coming to an end, at least when it comes to my regular chequing account. Why? Despite the generous corporate tax cuts provided by the Stephen Harper government, lowering all corporate taxes again on January 1st from 18% to 16.5%, borrowing from the country's children and grandchildren to pay for them, Scotia has decided to gouge its customers yet again.

On February 1st, Scotiabank increased its monthly charge for a basic banking plan to $8.95 from $7, a 27 per cent increase. At the same time, the number of debit transactions covered by the monthly fee fell to 25 from 30. The monthly fee for the Scotia One Account, which offers an unlimited number of transactions went up to $11.95 from $9.95, a 20 per cent increase. CIBC is similarly gouging its customers.

These monthly fees on accounts with barely anything in them on a regular basis (at least in my case) have recently been major irritants at $7 plus more if you exceed 30 transactions. Now at $8.95 a month plus more if you have more than 25 transactions in that month, they're intolerable.

I, of course, didn't find out about these fee increases from Scotiabank. I had to read about them in the Toronto Star yesterday, nine days into February. The changes also include a whopping jump to 19% on overdraft payments, up from about prime + 5.0. This is practically theft to customers who might've been in overdraft after February 1st, but weren't made aware of the fact that Scotia had more than doubled the percentage they were charging on those overdraft amounts.

Scott Tribe adds his thoughts on the same subject here.

There seems to be a sense among many in the corporate world that the hard-working, middle class is an endless tap from which millions of dollars can be sucked at will. Scotiabank, Canada's third-biggest lender, earned $1.1 billion just in the third quarter last year. That compared with a profit of $902 million in the same period in 2009.

This is not a corporation that needed a tax cut on January 1st of this year of 1.5%, one month before it would go back to long-time customers and gouge them for more!

I've had enough. I'm closing my Scotia chequing account and opening a new account at PC Financial which doesn't gouge its customers every month with a monthly fee. They even offer a tiny bit of interest on money in these accounts every month, unlike Scotia and other big banks.

I hope more customers of the major banks follow suit and close their basic accounts to move to institutions that are less disgustingly greedy and more respectful of their hard-working customers in these difficult times. ING Direct also offers chequing accounts with zero monthly fees plus a bit of interest on balances.

These are the big corporations that Stephen Harper and his minions call 'job creators', deserving of tax cuts on January 1st while the rest of us saw our monthly payroll deductions increase.

My father always used to say: 'The Conservatives are the party of the rich and the party of big business.' He was right. We need a new government in Ottawa as soon as possible, one that is on our side, not these endlessly greedy, gouging big banks!


WesternGrit said...

Your father was right.

How about using a credit union? I switched to a credit union years ago. I find them friendlier, and much more personable (probably because of the small size). They are community owned - not corporate - and you get to vote for their board of directors among other stuff.

In BC we can use our credit union ATM cards at any credit union nationwide - and in BC that means literally one credit union every block...

Matt Guerin said...

I'm looking into it. PC Financial offers cheques, no fees, etc. plus we can use any CIBC ATM to do our banking. That's convenient to me personally, whereas credit union ATMs are fewer and far between. But I'll do my research first before making my final move.

Rotterdam said...

I am a member of the DUCA credit union.
They share profits.

donald walker said...

Another thing to check - at one time PC Financial did not allow access from out-of-country ATMs, even in the USA. Our family account is with PC Financial for the no-fee policy, CIBC/Loblawa access and the rebate on all our groceries. We use it to buy the food for our big summer party. We can treat out friends and it's like it's free. Team up your acount with a PC Mastercard and earn a bigger rebate.