Historicist: Life in Wartime
Elsewhere in the Ist-a-Verse
Of all the things Canadians will boast about, our banking system isn't one of them despite being one of the strongest and most advanced in the world. Early co-operation between the financial institutions allowed Canada to become world leaders in the use of debit cards and internet banking, and we have the highest number of ATMs on the planet, per capita.
That means we have no excuse for not doing what people in other countries have been doing for years: making charitable donations at bank machines. HSBC in the UK started accepting voluntary donations in 2003 after their Mexican affiliate had success with this idea. Wells Fargo in Southern California has accepted contributions to the Red Cross, and banks in Qatar and the United Arab Emirates allow payments to the Red Crescent via ATMs.
This type of system works because it's a call to action with minimal effort at a minor cost. We often grumble about the multiple service charges we pay at ATMs, but most of us would have no problem adding a loonie to our transaction if it was directed to a charity. Shoppers Drug Mart does this at the register for their Tree Of Life campaign, asking customers (in front of a line of other patrons) if they'd like to add a buck to their bill for charity. For most, to say no would be embarrassing and callous as we then hand-over our Optimum Card to be scanned for deals.
The process at the ATM would be simple. Before completing the transaction, the customer would be asked if they'd like do donate $1 to charity, with the option to enter another amount. The next screen would allow them to choose from a list of organizations preselected by the bank. The donation would appear on one's monthly statement, and therefore be the record of deductibles come tax time. Alternatively, the bank could issue a charitable receipt at the end of each year.
Charitable options could also differ by region, allowing customers to donate to a regional charity like the Toronto Humane Society or AIDS Committe of Toronto. Since many causes campaign annually during a certain month, this could also be reflected at the ATM.
The majority of Canadians log about 40-50 ATM transactions per year. Multiply that fifty bucks by the millions of us who use an ATM each day and you can see how significant a program like this would be. We pay more than this in service charges, in turn helping the banks set annual record profits, but our willingness to pay an Interac fee or for a Starbucks coffee should be reason enough to encourage ATM donations.
The technology is already in place, and adding this option would mean a relatively simple software upgrade rolled-out to Canada's 18,000 bank machines. It would be nice to see at least one bank attempt this as even a pilot project, and considering our status as leaders in the electronic banking industry, it's shameful that it wasn't implemented years ago.
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That sounds like an awesome idea. I'd be up for it.
Sounds like a great idea. The only problem is I doubt the banks have the competence to pull it off based on the experience I had with RBC after moving to TO from Calgary. Apparently that requires closing all one's old accounts and opening new ones.
The best part of this, as you mentioned in the last paragraph, is that since we're dealing entirely with digital technology here, an upgrade would be simple and very, very inexpensive. If it wasn't digital, it's a lot harder to stand behind, and it'd be a lot easier for someone to maintain that it couldn't be done.
Then again, I absolutely hate ATMs, avoid them entirely, and got a credit card the moment that I realized how crappy debit cards were. My debit card's wallet decoration now, so I guess I'll have to get my dollar to charity another way.
David, what's wrong with debit cards and ATMs?
This is a great idea, although it would be even more amazing if the banks let you choose between paying their usurious $1-$2 fees to them or to a charity: Imagine how well charities would do! And people would hate banks less. And we have good reason to hate the banks in this country, which you can read about here:
http://www.cancrc.org/
It's an issue that doesn't get discussed enough in Canada. I'd be in favour of letting the big banks merge if they agreed to some basic levels of social responsibility and if the govt cleared some regulatory space for credit unions and other alternatives to be more effective.
For me, the biggest thing is fees (either on sale or at an ATM); credit cards do everything I need them to do and I don't have to worry about losing money on top of what I'm already spending. Sure, losing a buck or fifty cents may not be very much, but losing nothing's way better.
I use PC Financial. I don't pay any service charges for debit or ATM transactions as long as I use CIBC machines for the latter.
Plus, I don't have to worry about credit.
The deregulation of ATMs in 1997, which was supposed to help the little guy, was one of the worst things to happen. Many of those little "white label" ATMs you see in stores like 7-11 are actually owned by the big banks, but branded with different names. Because they are white label machines, they can charge whatever they want (usually $1.50) as a surcharge ON TOP of the $1.50 Interac fee, so you are often paying twice to your own bank.
Also note that these white label machines are entirely unregulated. Ones located at racetracks, tourist attractions, and strip clubs can have a per transaction fee as high as -- get this -- $20. Interac regulates its network for normal ATMs and point-of-sale devices, but white label ATMs aren't required to be Interac members.
But, as I mentioned, the most evil thing is how the big banks have quietly entered the white label ATM market because they can double-charge. You're paying $3 per transaction to take out your own money, and you still pay even if you have an unlimited ATM withdrawal clause with your bank.
Also note that anyone can own and operate a white label ATM. Anyone. Criminal record? Go right ahead.
I can write a more extensive article on this if people are interested.
I'm lucky... because my account is so old I don't get charged ATM fees as long as I use my own bank's machines and keep a reasonable minimum balance. So I debit everything and I hate credit, I find it unpleasant to have to pay for my purchases a month after they are made and forgotten.
As for the original topic of this post -- ATM donations -- I'd be all for it if, in exchange, the charities would stop hassling me on the street with clipboards. Of course that will never happen, so I'll no doubt be hassled on the way to the ATM, then again when I'm using the ATM, and then on my way home from the ATM. Between the charity chuggers and the innumerable homeless, Toronto is slowly turning me into a cold-hearted bastard, I swear.
Gary, if you have one of those old accounts that the banks used to dole-out with no fees, HANG ON TO IT. I know a couple people with these and the banks are always trying to get them to change them up with other offers (and as mentioned in a previous comment, switching branches inexplicably gives them reason enough to close them).
I think the key thing to this idea is allowing the customer to choose from a list of charities, even though they are selected by each bank. This allows you to choose not to donate to a cause you don't believe in or have been turned-off of. It would be cool if they even rotated from a larger list, but that causes some more problems.
Charities themselves might have interesting views on this since it would obviously be a boon for the "chosen" organizations, but for others, it encourages a phenomenon where people donate less because they feel they've already done the work at the ATM.
I think the list of multiple charities is absolutely essential. In my previous job, we were able to choose to have some money automatically deducted from each paycheque to donate to a charity, which I would have gladly done if it was an organization I believed in rather than one I had some issues with. I asked if we could choose other options and my employer said no since this charity was their "official" benefactor. OK, then. No thanks.
Same here, Jonathan. I also like having the money gone right away; I feel the pinch faster, which means I'm less likely to be able to spend unnecessarily. Plus, I feel better needing to punch in a PIN every time as opposed to having my card merely swiped and handed back to me.
I use debit so so much but my bank recently told me that I was flagged for possible identity theft. (Any non-bank ATM can be used to steal your info, while charging you the stupid $2.50 fee to do it.) SO now I am very very weary of where I use the card. Credit is so much more convenient!
Also, despite their insanely high bank fees, TD has a very good repuation for returning any stolen money within 24hours... whereas I know customers from CIBC who have waited weeks for their identity-thefted funds to return.
And, a tip: if you want cash but don't want to use another bank to withdraw, go to a Pharma Plus or a LCBO for cashback. One pack of gum or a tall-boy of beer is cheaper than ATM/bank fees (it's like you're getting it for free!)
Two years ago I went into the RBC on University and upgraded my account because I was paying so much for all the debiting/ATMing I was doing. I was paying more per month than the service charge of other accounts they offer. I started taking out cash once a week and using that for small purchases instead of Interac. So naturally they had to go jack up the service charges to compensate. And now they want $2 a month to return cheques. I use one bloddy cheque (rent) a month, I'm not paying $2 for it. When I complained they said they were the last bank to start doing this -- as if that negated the ripoff.
I hate banks.
Evil! Many people need their processed cheques for tax purposes or just for keeping basic records. I'm all for reducing the amount of paper that gets mailed to me, but RBC sent me a jovial email stating that they were so very pleased to offer the ability to see processed cheques online instead -- for the "convenience fee" of only two dollars. They also now charge service fees if I want to look at my account online more than three months back.
This is on top of the allegedly convenient fees I pay to even make an online transaction, which costs them nothing and allows them to cut teller staff (accessing a teller at the bank now also costs a fee). But I can also pay an annual fee to reduce the regular fees.
The fact that my VISA card has a $120 annual fee also brasses my ass considering how much money I put on it. And I paid off my first mortgage early, which the banks hated and therefore gave me more trouble on my subsequent mortgages lest I pay them off early again and avoid much of the interest. Not only that, but that first mortgage was even paid-off in the minimum time set by the bank. You pay penalities you if you want to pay-off your loan before their minimum timeframe.
One of the worst things for me was Mackenzie, whom I used to keep my RRSPs with. I couldn't get my rep on the phone ever, he wouldn't return any calls or emails, and each time I called someone else to ask about my account, they acted like I was cutting into their valuable time. Finally, in desperation, I transferred my RRSPs out of Mackenzie and had to pay THOUSANDS in penalties for "cashing them out," despite doing so only because of excruciatingly abysmal service. Hooray!
Note that the banks also sell your personal information to each other and other financial institutions, which is why I get so many pre-approved credit card applications, and one of the reasons indentity theft is so prevalent. Thank you, big banks, for making it so complicated to access my own money! :-* I'm glad that my information us so financially lucrative and fees are so steep so that you may serve me better!
No doubt that the banks would be all over this as they could surely find a way to parlay all of the small donations into their own sizable charitable tax deduction.
There would be huge privacy issues regarding receipting. The bank cannot issue a tax reciept -- for it is not the charity, but is merely acting as a fiscal agent for the designated charities. The banks could not provide the charities the personal information of each customer that gave via ATM (their lawyers would not let them), so no tax reciepts could be issued. If a tax reciept was issued to the bank, that means more money into the bank's pockets (by way of a tax credit). However, if no recepts were issued, it would be all just goodwill, and no tangible benefit for the donor (which is what giving is supposed to be about). ;)
I'm not as fervently anti-bank as some, possibly because I worked in banks for many years and have some idea of the economics. In general, if you have less than $5000 in your account most of the time, do 10-20 transactions a month and have no outstanding credit card or loan balances, the bank doesn't want your account no matter how many service charges you pay, because they are losing money on you. However, they're required by law to service anyone who wants an account.
Also, banks are not permitted to share info even between their own internal subsidiaries without specific client permission.
Not sure what happened there - let me try that again....
In general, if you have
Hey Patrick,
If you use a lesser than sign, the comment box thinks that it's the start of an HTML tag. I've edited your comment.
thanks David that would never have occurred to me..
The problem is that most people grant the right to sell their information by default when they sign-up for an account.
As far as the charity is concerned, your bank record should be a sufficient record for tax deductions, or the charities could give the banks permission to issue receipts on their behalf. The banks can provide the charities with your information if they requested it, although it seems the monthly statement method would make the most sense.
Rather than your dollar going directly to the charity, it would go to the bank, who would then distribute the collected amounts to the appropriate charities themselves. That's how other countries' ATM donations work.
A lot of the animosity comes from the knowledge that the banks couldn't care less about the average customer, but bend over backwards for their corporate and wealthy clients. Of course, this isn't surprising as they are international businesses, but through service fees and surcharges, the customer is essentially subsidizing a bank's disinterest in them.
In a perfect world, the vast profits they make from the higher end would go toward subsidizing the areas they don't make money on, like those with less than $5K in their accounts. I would never expect this to happen in a Western society, but it is an argument for tighter regulation on these behemoth corporations. I'm not one for regulating everything, but the deregulation of Big Business over the last decade or so, meant to inject life into the economy, has already proven to be disastrous. When allowed to run free, huge, publicly-traded corporations can't be trusted with anyone's interests except their own.
Sadly, it's usually this kind of money that can be used to influence real change, and therefore foster goodwill for a company. When your corporation hangs on its quarterly stock price however, there is little choice but to squeeze as much blood as possible from that stone.
Not to put too fine a point on it, the profits from big clients do subsidize the small accounts, which is one reason why banks don't seem to care about small account-holders. If they pull their accounts, the bank benefits.
Is it fair? Probably not, but banks are businesses,not charities. As afficiandos of the doc "The Corporation" will recall, banks are required by law to put the shareholders interests above all else, so we shouldn't be too surprised when they do. If they engage in charity, they basically have to prove that it benefits the bottom line for PR or other reasons.
Theoretically, if the charity does not, or is excessive by whatever standard you want to apply, the bank could face a class action lawsuit fronted by various funds which arguably are far more powerful than the banks themselves. In the real world, what is more likely to happen is the management will be canned and replaced by more stock price friendly execs.
"The problem is that most people grant the right to sell their information by default when they sign-up for an account."
This is a bold-faced lie.
Please post the link to the account agreement of the Canadian bank which allows it to sell your information. Read their privacy policies - its not allowed.
Not a bold-faced lie at all.
Canadian banks can't disclose information without your consent, but most people don't realize that their Client Agreement usually authorizes consent. In my case, my basic Client Agreement automatically allows my bank to share personal and business information "with other businesses, affiliates and subsidiaries" as well as "other financial institutions," which is why I get so many credit card offers from banks I've never stepped-foot into or for credit card brands I've never used.
On top of that, it doesn't necessarily have to be your own bank that peddles your data. Any financial institution with your information can resell it, from a transaction you made while on vacation, the banking institution used by a vendor when charging your credit card, or when ordering products on the internet.
The banks like to say how well they protect their information in their privacy policies, but read further and you'll see that you've likely granted them the right to sell it. People often also unknowingly (and additionally) consent when they sign up for discount programs, mortgages, loans, and credit lines.
You must opt-out after you've signed the Client Agreements, or at the time. You are NOT opted-out by default. Canadian banks can't sell to any outsiders, but they can sell your information to their partners that offer services in conjunction with them (for example CIBC and Shoopers Drug Mart or RBC and Esso or all the banks and the airlines). Remember, it doesn't have to be BMO itself, but its subsidiary Nesbitt Burns, for example, that can sell your information to another entity even if you haven't explicitly signed anything with Nesbitt Burns.
Privacy policies:
http://www.rbcroyalbank.com/privacy/info_dis.html
http://www.cibc.com/ca/legal/privacy-policy.html
http://www.td.com/privacy/index.jsp
http://www.bmo.com/economic/privacy.html
http://www.scotiabank.com/cda/content/0,1608,CID8309_LIDen,00.html