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FOR IMMEDIATE RELEASE
June 30, 2009
Consumers’ Voices Need to be Heard in Fight Between Business Groups
CAC Comments on the Senate Banking, Trade and Commerce Committee Report on Credit and Debit Cards
The Consumers’ Association of Canada (CAC) gives the Senate Banking, Trade and Commerce Committee a mixed grade for its report on the credit and debit card systems in Canada and their relative rates and fees.
"In terms of fees charged directly to consumers and various issuer practices we are extremely pleased that the Committee’s recommendations build on the Government of Canada’s nine-point action plan for credit cards. The CAC supported Minister Flaherty’s plan and we believe that the recommendation to build on that is positive," stated Bruce Cran, President.
"In terms of the fees charged to retailers, the report recognizes the benefits of competition in the marketplace,” continued Cran. “The Australian experience has demonstrated that government-imposed price controls on those merchant fees end up harming consumers. We are pleased that the Committee did not accept the merchants’ self-serving and hypocritical arguments in favour of price controls."
The Committee also supported a competitive framework in Canada’s debit payments system.
"Competition in Canada’s debit market means more consumer choice and convenience. Our position on financial sector issues has been consistent. The role of the Government is to provide choice and ensure consumers have the tools needed to make informed decisions," stated Cran.
However, the report contains two recommendations that are of serious concern to the CAC. First, it suggests merchants should be allowed to surcharge on credit card transactions.
"Surcharging mean higher prices for consumers. One clearly displayed price should apply regardless of payment. Our concern is that merchant surcharges will not be clearly explained to consumers and will far exceed the cost of card acceptance to the merchant. There are disturbing examples of this already happening in Canada," continued Cran.
Second, the CAC is concerned with the recommendation to eliminate the current requirement that a merchant "honour all cards" within a card payments system portfolio.
"When a consumer is told that a merchant accepts Visa they want to know that their particular Visa card will be accepted by the store. Allowing merchants to accept some Visa credit cards but not others will create massive consumer confusion. This recommendation is unworkable and anti-consumer," stated Cran.
In addition to its appearance before the Senate Banking, Trade and Commerce Committee on April 2, 2009, the CAC recently made a written submission to the House of Commons Industry and Finance Committees, which are holding Joint Meetings on the credit card and debit payments systems. The submission is available at:
http://www.consumer.ca.
The CAC decided to become much more active in this policy area because the voice of the consumer has been neglected, and often misrepresented, in this fight between merchants and the financial sector, with many of those claiming to speak on behalf of consumers simply representing their own self-interest.
The CAC is committed to ensuring that consumer interests are accurately portrayed and respected in this fight," stated Cran.
About the Consumers Association of Canada
The Consumers' Association of Canada (CAC), founded in 1947, is an independent, not-for-profit, volunteer-based charitable organization. Our mandate is to inform and educate consumers on marketplace issues, to advocate for consumers with Government and industry, and work with Government and industry to solve marketplace problems.
CAC focuses its work in the areas of food, health, trade, standards, financial services, communications industries and other marketplace issues as they emerge. A national volunteer organization, CAC maintains a national secretariat in Ottawa with regional representation in all Provinces.
The mission of the CAC is to represent and articulate the best interests of Canadian consumers to all levels of Government and to all sectors of society by continually earning recognition as the trusted voice of the consumer on a national basis.
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For more information:
Bruce Cran
President
(604) 418-8359
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