New Research Finds Junk Fees Are Negatively Impacting Canadians' Financial and Emotional Wellbeing

Most Canadians share that junk fees are eroding their trust in financial services, particularly for international payments. More than three quarters of Canadians are calling for policy change. 

TORONTO, Dec. 3, 2024 /CNW/ - A new survey by Wise, the global technology company building the best way to move and manage money internationally, reveals the ongoing financial stress and undue personal harm caused by junk fees. Additionally, the findings highlight Canadians' desire for more financial services and transactions to be included in proposed federal junk fees legislation.

By surveying 2,500 Canadians nationwide, the new research found that many individuals experience notable negative effects due to junk fees, with over half (57%) of Canadians stating that the quality of their emotional well-being is adversely influenced by junk fees. This is especially true of fees hidden in daily financial transactions, which are notably found in international payments.

Findings show that most (81%) Canadians were negatively impacted by a hidden fee after making an international money transfer. Still, the federal government has yet to address hidden fees in financial services beyond non-sufficient funds fees. Hidden fees in international payments — which are often inflated exchange rate mark-ups — have been overlooked in junk fees legislation, despite 79% of Canadians wanting it to be a priority.

Unsurprisingly, an overwhelming majority of Canadians (96%) expect to see all fees transparently and upfront before using a financial service, meaning additional fees are unplanned costs that impede on their budgets. Canadians noted that these unplanned fees are having a major impact on their lives, preventing them from effectively budgeting (54%), making plans to travel (48%) or saving for larger purchases like a home (51%).

"Canadians are under financial pressure and junk fees are only making things worse," said Brigit Carrol, Senior Policy and Campaigns Manager, Americas at Wise. "I hope these insights compel policymakers in Canada to start having important conversations about broadening junk fees legislation to include financial services and transactions, particularly hidden exchange rate markups in international payments. Broadening the scope when looking to alleviate unnecessary financial stress for their citizens is not a could do, it's a must do."

Junk fees have eroded consumer trust and altered their behavior

As the awareness of junk fees increases, Canadians are ultimately re-evaluating their purchasing choices.

A staggering 86% of respondents indicated that junk fees have influenced their decisions about which companies to patronize, and nearly three-quarters (74%) reported that they have stopped or intend to stop using a specific company or service because of these fees.

It is clear that junk fees are having a profound impact on consumer trust, and results of this survey prove this statement — 75% of respondents expressed reduced trust in their financial institutions because of junk fees.

Canadians deserve to be heard

The research also found that over half (51%) of the population has sent money abroad in the past year. It's clear that Canadians are prioritizing international payments and transactions, and that policymakers should be doing the same as they work to address junk fees.

"Canada is home to a diverse population of generational immigrants and world travelers who deserve to have peace of mind when sending or receiving money abroad. Instead, this process often leads to unnecessary financial strain," said Carrol. "The responses of this study showcase that hidden fees in international payments must be part of continued discussion on this issue, or financial service providers and policymakers risk losing Canadians' trust for good. With these findings, we hope to reignite the conversation on junk fees."

To read the full Wise Junk Fees report, please visit: https://wise.com/community/canadajunkfees

Research methodology

This survey was fielded between October 4 and October 8, 2024 with a total of 2,562 Canadian respondents between the ages of 18 to 60 years.

The survey was conducted by Dynata, and commissioned by Wise, and data was weighted to ensure a nationally representative sample of the Canadian population.

Results from the full survey have a margin of error of plus or minus 2 percentage points. Percentages in this report may not add up to 100% due to rounding.

Wise is a global technology company, building the best way to move and manage the world's money. With Wise Account and Wise Business, people and businesses can hold 40 currencies, move money between countries and spend money abroad. Large companies and banks use Wise technology too; an entirely new network for the world's money.

One of the world's fastest growing, profitable tech companies, Wise launched in 2011 and is listed on the London Stock Exchange under the ticker, WISE.

In fiscal year 2024, Wise supported around 12.8 million people and businesses, processing approximately £118.5 billion in cross-border transactions, and saving customers over £1.8 billion.

Contact: Samantha Krupa-Carbone, Skrupa-carbone@national.ca

SOURCE WISE