Junk fees will soon be a thing of the past in Canada. The federal government tabled a motion to eliminate hidden fees last year, outlining measures to protect Canadians from unfair charges on a variety of accounts, goods, and services.
These measures are still in their incubation stages, meaning junk fees may still exist in your life today. Until official legislation comes into place, keep an eye out for these extra costs — from draws fees on lines of credit to excessive event fees and more.
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Draw Fees
If you have a line of credit, you are probably aware that the money you use doesn’t come for free. Lenders apply interest on the draws you use, earning a percentage on every transaction you make until you pay your balance back in full.
Interest is a normal cost of borrowing, but draw fees are one of those sneaky ones. Certain lenders charge a fee when you make a draw against your line of credit, separate from the interest that will eventually apply.
Not all lenders will do this. You can visit a website like Fora to see how a lender commits to zero additional fees. If approved, a Fora Credit line of credit will apply interest on the amount you use, not your total limit.
Roaming Charges on Cell Phones
Have you ever gone on vacation and come home to an enormous phone bill? Roaming charges apply when you leave your home network and can be quite costly.
The international roaming charge applied by many mobile phone companies is another junk fee in the crosshairs of the government The Canadian Radio and Television Committee (CRTC) is investigating how the major telecom companies have doubled these ancillary fees in the past five years.
Why? As a junk fee, roaming charges aren’t included in the base price advertised on their website or your plan. They’re nearly invisible, making them hard to understand. They also reflect how much roaming you do, which isn’t always clear to mobile users. As a result, the final fee can be an unexpected addition to your budget, even if you roam somewhat regularly.
Concert Fees
Your favourite band is touring, and they’re actually coming to your town. As luck would have it, there are seats still available, and they aren’t as expensive as you thought they would be.
That is, until you get to the checkout page, and see your total is a lot different than you expected. You can see a long list of surprising charges applied to your ticket price: a service fee, order processing fee, convenience fee, and taxes.
The problem here is how a company like Ticketmaster can advertise a low price at the outset, only to slap additional fees at checkout. The advertised price is deceptively low to lure as many people to the checkout page as possible. Big fans, especially in the shadow of the pandemic’s lockdowns, are often stuck paying these additional fees.
Ticketmaster is free to apply these additional fees. But the government says it’s not fair to consumers to hide them. They’re pushing for transparency in all things, from lines of credit to concert fees and the cell phone bills in between. Until then, it’s up to you to understand where fees apply and how you can avoid them.
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