Telecommunications company Telus is asking the Canadian Radio-television and Telecommunications Commission (CRTC) for permission to add a 1.5 per cent surcharge to the bills of customers who pay their bill using a credit card. If approved, it will take effect from October. For a hypothetical customer in Alberta whose cell phone bill is $100, the charge would bring their bill to $106.66 — $100 for the basic bill, plus $5 for GST, a surcharge of $1.58 for the new charge in addition, plus another eight cents in GST on top of the surcharge. “The company plans to provide advance notices of the fee to its existing customers beginning in mid-August,” Telus said in its letter to the regulator.
The charge could take effect by October
The company is asking the regulator to rule on the proposal by Sept. 7 and would like to begin imposing the new fee starting Oct. 17, and while the CRTC must rule on the matter, in a statement to CBC News the telco made the plan sound like a done deal. “Beginning in October, Telus mobility and home customers who choose to pay a bill by credit card will be charged a 1.5 percent credit card processing fee,” Telus told CBC News. The company also said in the statement that many other major utilities already charge a fee for credit card payments, including the Canada Revenue Agency, the City of Toronto and electricity and gas providers such as Enbridge, Epcor, BC Hydro, FortisBC and Alectra . “This fee helps us recover some of the processing costs we incur for accepting credit card payments, and the average cost will be around $2 for most customers,” the company said, noting that it can easily be avoided by paying through a bank . via debit transaction or other means. Although the company didn’t provide an exact breakdown, Telus says most of its customers currently pay through a method that won’t accrue the fee. Telus discount brands, including Koodo and Public Mobile, will not be charged, nor will customers in Quebec. WATCHES | Why Canadians pay more for telecom services than many other countries:
Are Canadians Paying Too Much for Internet and Cell Phone Services?
Consumer advocate and wireless bill expert Mohammed Halabi helps explain why Canadian internet and cell phone bills are so high — and what consumers can do to negotiate lower prices. Telus’ reasoning for the move stems from a development this summer when credit card companies, including Visa and MasterCard, agreed to a settlement that will allow them to refund millions of dollars in credit card processing fees paid to them by merchants all these years. Importantly, this settlement also gives the companies permission to start charging customers those fees directly starting in October, which Telus is trying to do. Previously, many merchants were not allowed to charge customers directly for the fees credit companies charge them for processing sales. Such fees can range from less than one percent of the sale to more than 3 percent for some premium cards. Because almost every part of its business is regulated by the CRTC, Telus needs the regulator to start charging fees that consumers can expect to start seeing from various merchants soon. CBC News reached out to Rogers and Bell to see if they have similar plans in the works, but representatives for both companies did not respond to a request within a business day.
Some customers are not happy
Some wireless customers aren’t thrilled by the idea. Kenneth Hart of Windsor, Ont., a Telus customer for 15 years, calls the plan a “money grab.” Kenneth Hart has been a Telus customer for 15 years and says the company is wrong with this new policy. (Kenneth Hart) “It’s a bad business move,” he told CBC News. “They have some accountants telling them this is good. But then you talk about the PR costs, the reputation costs and it could create … resentment for those customers who are already … not satisfied.” “This could be the straw that broke the camel’s back.” Telus only filed the application on Monday and the CRTC has already reached out to more than 200 Canadians through its website, many of whom oppose the plan. Steve Struthers is one of them. The London, Ont., resident isn’t a Telus customer, but he took the time to give his two cents to the regulator because of how opposed he is to the plan. “Consumers are already extremely stressed with unaffordable housing, increased food prices, high gas prices and wages not keeping up with any of that,” he told CBC News. “I’m sure they could afford to absorb a 1.5 percent credit card fee… It bothers me that the carriers aren’t happy with the money they’re making and still want more in an environment where people reach limit as to what they can pay’.
“The last thing anyone needs is a surcharge”
Rosa Addario, a spokeswoman for telecoms watchdog OpenMedia, says the plan is just the latest way for the industry to squeeze more revenue from cash-strapped Canadian consumers. “All three of our telcos … have reported increased earnings, increased revenue and increased customers for 2021,” she told CBC News. “They’re doing better than ever. This is just another way to drive up our bills through shady practices and surcharges and adding stuff on top so we’re paying even more than we already are.” Suze Morrison, a former Ontario MPP, is urging the CRTC to reject the proposal, noting that it would disproportionately affect people who are already financially vulnerable. “Working-class people, low-income people are really struggling to get by right now,” she told CBC News. “The last thing anyone needs is an additional charge just because of how they pay their phone bill to keep their phone lines connected.” WATCHES | Canada has 3 major telecommunications providers. Could this change?
Could Canada Grow Beyond The Big 3 Telecoms?
After a nationwide Rogers shutdown, John Lawford of the Public Interest Advocacy Center talks to The National’s Andrew Chang about how Canada ended up with just three major telcos and whether that can ever change. While credit card surcharges are creeping into many businesses, he says it’s different for a telco to charge them because it’s a necessity. “A consumer has a choice of going to a mom and pop restaurant or cooking dinner at home or going to a restaurant that doesn’t charge a credit card swipe fee,” he said. “But we’ve allowed so much consolidation in our telecommunications industry and there’s such a monopoly in the industry that it’s not like people can say, ‘OK, well, if you’re going to charge a fee, I’ll take my business somewhere else.’ I have nowhere else to go.”
