Consumer group wants audit into credit card profits

The federal government's financial regulator should audit the credit-card operations of Canada's banks to figure out whether their profit margins are tantamount to gouging, a leading consumer group testified Thursday at a parliamentary probe into the credit and debit markets.

A day after the Canadian Bankers Association declined to answer a pointed question from senators about how much banks make for every dollar invested in the credit-card business, the country's bank accountability coalition said it's time the Financial Consumer Agency of Canada or the auditor general is allowed to go in and get the answers.

"The solution is to empower the FCAC or auditor general to do an audit of actual costs and revenues and actual profit margins," said Duff Conacher, chairman of the Canadian Community Reinvestment Coalition. "Simply having a public report would cause fees and rates to come down the next day because I think there's ample evidence of gouging going on."

He cited unilateral increases of interest rates and extra fees charged on purchases made outside Canada as examples.

"Based on what? Who knows. That's why we need an audit. . . . The banks have all the figures and they can claim anything they want," said Conacher.

The FCAC, established by the government in 2001, enforces consumer-protection laws and monitors codes of conduct at banks and federally incorporated trust, loan and insurance companies.

Continue Reading at the Montreal Gazette