Canadians who pay their cellphone bill with a credit card could soon see an extra fee every month, if Canada’s telecom regulator approves a proposal currently before them.
Telecom 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 would be in place starting as soon as October.
For a theoretical customer in Alberta whose cellphone bill is $100, the charge would bring their bill to $106.66 — $100 for their basic bill, plus $5 for GST, a $1.58 surcharge for the new fee on top of that, plus another 8 cents in GST on the surcharge.
“The company plans to provide advance notices of the fee to its existing customers starting in mid-August,” Telus said in its letter to the regulator.
Fee could be in place by October
The company is asking the regulator to decide on the proposal by Sept. 7 and would like to start levying the new charge as of Oct. 17, and while the CRTC must rule on the matter, in a statement to CBC News the telecom company made the plan sound like a done deal.
“Starting in October, Telus mobility and home services customers choosing to make a bill payment with a credit card will be charged a 1.5 per cent credit card processing fee,” Telus told CBC News in a statement.
“This fee helps us recover a portion of the processing costs we incur to accept credit card payments, and the average cost will be around $2 for most customers,” the company said, adding that it can easily be avoided by paying through a bank, via a debit transaction, or other means.
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Telus’ rationale for the move stems from a development this summer, when credit card firms including Visa and MasterCard agreed to a settlement that will see them refund millions of dollars worth of credit card processing fees that merchants have paid them over the years. Crucially, that settlement also gives businesses permission to start charging customers those fees directly starting in October, which is what Telus is trying to do.
Previously, many merchants weren’t allowed to charge customers directly for the fees that credit companies charge them for processing sales. Such fees can range from less than one per cent of the sale, to more than three per cent for some premium cards.
Because just about 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 a variety of merchants soon.
CBC News reached out to Rogers and Bell to see if they have any similar plans in the works, but representatives of both companies did not reply to that request within one business day.
Some customers aren’t happy
Some wireless customers aren’t enthused by the idea. Kenneth Hart of Windsor, Ont., a Telus customer for 15 years, calls the plan “a money grab.”
“It’s a bad business move,” he told CBC News in an interview. “They have some accountants telling them this is good. But then you talk about the PR costs, the reputational cost, and it could create … dissatisfaction 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 heard from more than 200 Canadians via its website, many of which are opposed to the plan.
Steve Struthers is one of them. The resident of London, Ont., is not 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, expensive gasoline prices and wages that are not keeping up with any of this,” he told CBC News in an interview.
“I’m quite certain they could afford to absorb a 1.5 per cent credit card fee … It bothers me knowing the cellphone companies aren’t happy with the money they’re making and they still want more in an environment where people are reaching their limit as to what they can pay.”
‘The last thing anyone needs is an additional fee’
Rosa Addario, a spokesperson for telecom watchdog OpenMedia, says the plan is just the latest way for the industry to extract more revenue from cash-strapped Canadian consumers.
“All three of our telecom providers … have reported increased profits, increased revenue and increased customers for 2021,” she told CBC News in an interview. “They are doing better than ever. This is just another way to raise our bills through shady practices and extra fees and adding things on top so that we are paying even more than we already are.”
Suze Morrison, a former Ontario MPP, is urging the CRTC to reject the proposal, noting that it will disproportionately impact people who are already financially vulnerable.
“Working class people, low income people are really struggling to make ends meet right now,” she told CBC News in an interview. “The last thing anyone needs is an additional fee just because of how they pay their telephone bill to keep their phone lines connected.”
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While credit card surcharges are creeping into many businesses, she says it’s different for a telecom utility to charge them because it is a necessity. “A consumer has a choice to go to a mom and pop restaurant or to cook dinner at home or to go to a restaurant that’s not charging fees for credit card swipes,” she said.
“But we’ve allowed so much consolidation in our telecom industry and there’s such a monopoly in the sector that it’s not like folks can say, ‘OK, well, if you’re going to charge a fee, I’m going to take my business somewhere else.’ I have nowhere else to go.”