Junk fees

Junk fees: they can add up rapidly, they're often applied without clear disclosure and they frequently provide no additional value to your purchase.

You might notice junk fees as you're about to proceed with a transaction, and if you've signed up for a subscription-based service, they might be charged on an ongoing basis.

These tacked-on fees—some so small you might not notice them right away, others, big enough that they drastically change the final cost of your purchase, are making products and services more expensive. And, as a result, you can end up spending more than you intended to when shopping for essentials. If you're trying to stay on a budget or if you're following a plan to manage your debt, these types of surprises can set you back from your financial goals.

Transparency matters when it comes to pricing goods and services so consumers like you can make informed purchasing decisions. Learn about the types of fees you might come across in the marketplace and the actions being taken in federally-regulated sectors to reduce how frequently you encounter them.

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Examples of junk fees in the marketplace

Drip pricing

Drip pricing occurs when a merchant displays an advertised price that excludes mandatory and fixed additional charges. It is a business practice that the Competition Bureau recognizes as a harmful and it is illegal under the Competition Act because displaying a price without the hidden fees can deceive both consumers or business competitors about the price of a product or service. It affects consumers' ability to make informed purchasing decisions by misleading them about the final cost, and it can negatively impact competition by misleading business competitors about the price being offered to consumers.

You can learn more about hidden fees by checking out the Competition Bureau's consumer alert on drip pricing and you can report drip pricing by submitting this online complaint form.

Telecommunications service fees

Junk fees shouldn't be a barrier to accessing essential services like cell phone plans or the Internet. You may be familiar with fees levied to cancel, switch or even change your phone number. Thanks to work undertaken by the Canadian Radio-television and Telecommunications Commission (CRTC), many of these fees have been eliminated and your protection is enhanced by the Wireless Code and the Internet Code. You now have more affordable choices and flexibility when it comes to choosing a cell phone or home Internet provider.

With the Wireless Code:

  • you are not required to pay cancellation fees for terminating a contract
  • you can now unlock a mobile device for free
  • you can port your phone number to a new service provider for free
  • you have the option of changing providers or plans at no cost if you realize within the first 15 days that the service does not meet your needs

If you use the Internet at home, you're also protected by the Internet Code. While it primarily focuses on issues related to contracts, service agreements with your provider, billing practices, and service delivery, it also protects you from paying additional fees.

With the Internet Code:

  • your provider needs to create contracts that are easy to understand
  • your provider needs to provide you with all the information about its policies in writing
  • your provider must be clear about fees, prices, bundles, promotions and time-limited discounts
  • your provider must let you know when you're getting close to or have reached your data limit
  • you can cancel a new service within 45 days with no fees
  • you get a trial period of at least 15 days and the maximum time your provider can impose early cancellation fees for is 24 months

The CRTC is also working on making amendments to the Telecommunications Act to reduce the cost and increase access to Internet, home phone, and cell phone plans.

If you've been unsuccessful in resolving an issue regarding fees for telecom services with your provider, you can submit a complaint to the Commission for Complaints for Telecom-television Services (CCTS).

Transportation-related fees

The Air Passenger Protection Regulations (APPR) requires advertisers of air services for travel within, or originating in Canada, to provide you with a breakdown of the total price, in Canadian dollars, inclusive of all taxes, fees and charges which you must pay in order to obtain the air service being advertised. The APPR requires that these fees are clearly laid out for you. This will help you select fares based on the full price of the travel options that best meets your needs.

For parents, guardians or tutors, the APPR currently requires airlines to facilitate, at the earliest opportunity and at no extra cost, the seating of children under the age of 14 near you.

The Canadian Transportation Agency was asked to amend the APPR to remove the differentiation by age group and impose on air carriers the same requirement for all children under the age of 14 to be seated next to their parent, guardian or tutor, at no extra cost.

You might still incur additional fees when you travel by plane for optional services at various steps of your journey, such as fees related to baggage, seat selection and in-flight meals.

What doesn't qualify as a junk fee

Not all additional fees added to the price of your purchase are junk fees. The Goods and Services Tax and the Provincial Sales Tax you pay aren't junk fees. Rather, they are mandatory taxes that apply to sales in Canada.

If you choose to upgrade your hotel room to get a better view or if you want to add extra toppings to your pizza, you aren't being asked to pay a junk fee. Rather, you're paying a premium to upgrade your experience.

Similarly, fees that depend on your location, for example, a shipping cost tailored to the address a merchant sends your purchase to, are variable fees because of the initially unknown distance the item will need to travel to get to you. Often times, shipping fees cannot be included in a vendor's price until the merchant knows your address, so adding these costs at checkout isn't considered to be a form of junk fees.

Collaborating for consumer protection

Consumer protection is a shared responsibility between federal, provincial and territorial governments.

Junk fees fall under federal jurisdiction when they are the result of drip pricing, other misleading sales tactics, or are incurred in purchases made in a federally regulated sector (e.g., telecommunication).

Other types of junk fees fall under provincial or territorial jurisdiction when the transaction between a consumer and merchant is in a sector where consumer protection is the responsibility of the province. An example could be extra fees tacked on to your vacation accommodations. The Consumer Hub and the Office of Consumer Affairs websites as well as your provincial or territorial consumer affairs office, can help you determine who to contact for information about junk fees in a particular sector.

The Office of Consumer Affairs (OCA) is actively engaging with partners across all levels of government to reduce these unnecessary costs. The OCA will continue to update Canadians on the actions being taken to reduce how frequently you come across junk fees and to improve transparency in pricing, enabling Canadians like you to make informed decisions and helping make life more affordable for all.

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