Bank charges and Low-Income Persons: A Portrait of the Situation


Olivier Bourgeois


Option consommateurs




In this study, Option consommateurs attempted to determine the attitudes of low-income Canadian households towards bank charges and how much they know about them. They were also interested in the information that financial institutions provide to consumers concerning the availability of low-cost accounts. In seeking answers to these our questions, Option consommateurs conducted semi-structured telephone interviews with 100 low-income Canadians from Montreal and Toronto, and obtained a copy of their bank statements. Finally, Option consommateurs visited 27 branches of the largest financial institutions in Canada to find out what their information disclosure practices are and whether they comply with the federal Low-Cost Account Guidelines. In light of the results obtained, Options consommateurs concluded that low income consumers are unable to adequately assess the costs related to their checking accounts and spend more than they believe on bank charges. This study also found that representatives of financial institutions do not fulfill their obligations regarding the disclosure of information in their branches or use all the tools at their disposal to adequately inform consumers about banking packages. Additionally, this study found that consumers were generally not informed of the different options available to them with regard to banking charges.

Options consommateurs has identified four recommendations: firstly, that a capped monthly charge be included in the minimum requirements for Low-Cost Accounts that corresponds to the lowest monthly cost of unlimited plans offered by a Canadian financial institution. Secondly, they recommend that financial institutions improve the training of their customer service representatives. Thirdly, that the Compliance and Enforcement Branch of the Financial Consumer Agency of Canada conduct an inquiry to verify whether financial institutions meet their commitments with regard to the disclosure of information in their branches. Finally, they recommend that consumers shop around for the best banking package and find out from each institution how they can reduce what they spend on bank charges.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

Contact information

50 Sainte-Catherine street West, Suite 440
Montreal, Quebec
H2X 3V4
(514) 598-7288
(514) 598-8511

Source: Consumer Policy Research Database

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