Thursday, January 25, 2007

Hand's In Your Pocket

This is good news for working folks who get ripped off everyday when you use the bank machines. It's a heck of a better political platform than another GST cut or a tax credit. A buck fifty a shot is a heck of alot more than the pennies saved on the GST or the one time tax credit, which is not cash in your pocket but a promise to pay.

TORONTO (CP) — NDP Leader Jack Layton is accusing Canada’s big banks of “gouging” clients by charging ATM fees to access their own cash.

Layton says he wants the practice outlawed.

He says it’s just not fair to force someone to pay $1.50 for withdrawing or depositing $20 or $30 from a bank machine.

Banks had $19 billion in profits last year and Layton says they don’t need the cash.

Layton says bank fees have simply gone too far.

The banks called Layton’s comments “nothing more than political rhetoric” and “bank bashing.”

Bank bashing, I think not. Ask why ING does not charge service charges or ATM charges. It's a bank.

While disgruntled shareholders can sell their stock if they believe their CEO is making too much money, few of us can avoid forking out interest payments and service charges to the big five banks - which in 2005 paid their CEOs an average of nearly $14.9-million, according to a Globe and Mail survey. Cue the NDP leader once more.

"We're working to protect families from outrageous bank service fees and credit card interest rates," Layton told his caucus. "As families open their bank and credit card statements this month, the unfairness of this can't be missed. I want to say very specifically that we will continue to fight for changes that will mean affordability and fairness for the average bank customer."

ATM service charges are the biggest cost you pay over and above monthly service fees the banks charge you.

Wait a minute what the heck are they charging you monthly fees for when they use your money to make more money.

You get charged twice, once at the machine and then again by your own bank! Bank bashing indeed.

And why are they charging you a bank fee for using the ATM which they own jointly as an oligopoly.

Just like they own the Credit Card companies Visa and MasterCard which charge an interest rate only just below what would be called criminal usury.

Why do Hands in My Pocket ads make so much sense in Canada? In Canada, the credit card market is dominated by a powerful oligopoly of 5 major banks. These banks, known as the Big 5, typically price their cards at rates around 20% (much higher than rates seen in the U.S.). As a result, resentment is driving Canadians towards Capital One’s low rate credit cards. In 2004, Capital One launched a 5.99% low rate credit card that was the lowest rate in the country. More interestingly, the rate was 14 percentage points BELOW the typical rate of a Canadian credit card. Accordingly, the Hands in My Pocket campaign is very effective.

And some privatized ATM's are charging as high as $3 in service charges to get your money out.

Luckily that one is at Hudson's on Whyte and the folks that drink there are local business types and Conservative MP's so they get what they deserve, but they probably use their credit cards so they can put it on their expense accounts.

hands in my pockets


Service Charges


Bank Profits

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