How do you know if you’re paying junk fees in Canada? | Blog

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A Canadian couple on the phone with customer service, trying to figure out if they're paying junk fees.

The Get

How do you know if you’re paying junk fees?

For this week’s No More Ls column, we’re looking at junk fees in Canada.

By Lisa Hannam

Junk fees seem pretty straightforward: paying for trash. Not literal “garbage” but any costs that nobody wants or needs. Junk fees, according to the department of Innovation, Science and Economic Development Canada (ISED), are tacked-on charges that add up rapidly, often without clear disclosure, and provide no additional value, increasing costs.

So, what could that include? Glad you asked: “Every single Canadian has dealt with unfair fees. Whether they are excessive roaming fees, excess banking fees, or being charged extra to sit with your kids on an airplane, these fees add up,” according to the 2023 Fall Economic Statement.

Here are the types of junk fees Canadians can encounter.

Drip pricing: This is when an advertised price isn’t transparent about the additional costs until the moment the purchase is made.
Extra telecommunications charges: Fees for changing or cancelling a phone plan, and excessive roaming charges.
Unexpected bank fees: Non-sufficient funds (NSF) fees for bounced cheques or pre-authorized debits, along with other hidden account and transaction fees.
Captive travel costs: When you have to pay for things in addition to the price of the tickets or stay, such as booking, baggage, seat selection, in-flight meals, mandatory cleaning, and more.
Event premiums: This means surprise fees on event and concert tickets, such as fulfillment, facility access, convenience or resale costs.
Processing and administrative fees: These are only considered “junk” when they’re not clearly disclosed with the purchase price.

So, the question isn’t really about knowing if you’ve paid them, but rather knowing how to avoid them. Ensure that the price you’re told is what you’re paying. Ask about any costs listed in the fine print, and inquire about any and all price tag discrepancies. You can also reach out to customer service to resolve any issues where you feel you’ve been deceived. But if that doesn’t work, you can formally file a complaint, suggests the ISED. Here are some options:

The Competition Bureau by using its online complaint form
Your provincial or territorial consumer affairs office
The Better Business Bureau
The Canadian Anti-Fraud Centre

Know though, that “The Competition Bureau is responsible for the enforcement and administration of the Competition Act and the Act does not cover every category of junk fee,” says Marianne Blondin, a spokesperson for The Competition Bureau, adding that the government department focuses on drip pricing. “Broadly speaking, the Act prohibits businesses from making materially false or misleading claims to promote a product, service, or any business interest.”

A claim, says Blondin, can include online and in-store advertisements, social media posts, promotional emails, terms and conditions, and other marketing messages. “A claim is material if the general impression it conveys influences someone to take a specific course of action, like purchasing or using a product or service. To determine whether a claim is false or misleading, the courts consider both the general impression of a claim, as well as its literal meaning.”

For example, the Competition Tribunal ruled in favour of the Competition Bureau and found that Cineplex had misleading drip pricing by advertising ticket prices that didn’t include the mandatory $1.50 online booking fee. “As part of its ruling, the Tribunal ordered Cineplex to pay a financial penalty of over $38.9 million dollars and legal costs,” says Blondin. “We have taken action against drip pricing for many years under the deceptive marketing practices provisions of the Act, notably in the online sporting and entertainment ticketing, car rental and satellite radio subscriptions industries.”

So, the takeaway is to be aware of what you’re paying for. In a time when fixed payments are automated and we pay with a tap of our debit and credit cards, we will all save ourselves money by taking note of junk fees and asking questions.

Lisa Hannam is an award-winning editor and journalist, and she is the Editor-in-Chief of The Get. She has previously been at the helm of celebrated Canadian publications, including MoneySense. She completed the Canadian Securities Course in 2024.