The fees most Canadian banks charge their customers are hard to see or anticipate, and the associated costs can add up quickly over time, a new report says.
The Financial Consumer Agency of Canada, a federal watchdog, released a report Friday which reviewed how Canadian banking fees are structured, disclosed and experienced by consumers. It was conducted on request by the federal government in Budget 2025.
The report examined some of the most common fees consumers see, including for deposit accounts and related banking services.
It found there is a general lack of transparency in some of the ways banks charge their customers, which are often complex and leave little wiggle room for consumers that may grapple with the costs.
“Canadians should be able to clearly understand what they are paying for banking services,” said Shereen Benzvy Miller, commissioner of the Financial Consumer Agency of Canada in a release.
“When fees make the full cost harder to see, it affects both affordability and competition.”
To help avoid confusion, the agency suggests banks offer personalized, usage-based information to customers.
Some examples of fees examined in the report include those for account maintenance, excess transactions, the use of an ATM, non-sufficient funds and overdraft protection, currency conversion and cross-border debit, prepaid product payments and fees charged for customers to transfer-out funds to another bank.
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The report says many of the fees can be combined, depending on the transaction or service, and consumers may not fully understand how those costs will add up before completing those transactions — even with current point-in-time disclosures.
Some of these fees and overall costs to consumers are avoidable or can be reduced in certain circumstances, but consumers may not be aware.
These include fees that add up when a customer exceeds their account limits, multiple fees on a single ATM withdrawal, when a fee on prepaid payments is withdrawn from that same prepaid payment and reduces its available balance over time, and when the cost of overdraft protection may cost less than a combination of fees for non-sufficient funds or dishonoured payments.
“Consumers may find it difficult to monitor their transaction usage throughout the billing cycle and to anticipate when excess transaction fees will be charged,” the report says.
“Banks are not required to notify consumers when they are approaching or have exceeded their transaction limits. As a result, consumers may only become aware that excess transaction fees have been charged after the end of the billing period.”
The report suggests changes be made to require that banks provide notifications when customers are nearing their transaction limits or may incur excess fees.
It adds: “Repeated reminders would increase the salience of these costs and may prompt consumers to reassess their account usage or consider alternative options that better align with their needs.”
Earlier this year, the federal government capped the fee banks can charge its customers for having non-sufficient funds, or NSFs, at $10.
Deciding which bank to go with can also be a challenge for consumers, the report says, noting that when consumers are deciding which bank’s fee structure aligns with their specific needs, many banks make comparing their products and services too complex.
For example, account holders may not be aware when the features they are entitled to no longer align with their needs, and when alternatives are available that are more helpful and cost effective.
Some banks have fees or processes that may also discourage consumers from switching accounts or banks. This includes transfer-out fees some banks charge customers to move money from one account to another.
The report says there are also barriers that make it difficult for consumers to compare products and services across institutions, including limited visibility into total banking costs over time.
“More transparency makes it easier for consumers to compare options and save money, and financial institutions have stronger incentives to compete for their business,” said Benzvy Miller, the watchdog’s commissioner.
The report from the Financial Consumer Agency of Canada comes amid an ongoing lawsuit and pending settlement that alleges CIBC unfairly charged non-sufficient funds fees to customers multiple times for the same transaction. A similar settlement involved TD Bank in 2024.
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