Tuktoyaktuk, N.W.T., man questions 'crazy' $6 ATM fee
Lack of competition and no regulations leaves Northern customers vulnerable to high charges
Merven Gruben's mom needed some cash for her upcoming trip to Paulatuk. So Gruben, a prominent businessperson in Tuktoyaktuk, went to his community's Northern Store to use the ATM machine. It's one of only two ATMs in the bank-less hamlet.
Gruben needed $1,200 and took it out in two installments of $600. (There's a limit on how much you can take out in one withdrawal.)
Both times, the machine charged him $6 for the transaction — about double what banks and other private ATM operators charge in other parts of N.W.T. and in Nunavut.
| Alanco Holdings ATM at Stanton grocery store in Tuktoyaktuk | $2 |
| Direct Cash ATM at Yellowknife Inn | $2.50 |
| Arctic Co-operatives Ltd.'s member co-ops | $2.50 average |
| Alanco Holdings ATM at Yellowknife Your Independent Grocer | $2.75 |
| Three banks sampled in Yellowknife | $3 |
"I thought that was pretty crazy," said Gruben.
When Gruben took to Facebook to complain, other Northerners shared what the North West Company — which owns the ATMs at its Northern Stores and Northmarts — has charged them in ATM fees.
"When I withdrew $400, it cost me a $5 fee. So nuts," wrote Barb Adjun.
The more money you take out, the more you pay
Though the North West Company would not confirm this, fees charged at its ATMs appear to be based on a simple formula: the more money you take out, the higher the fee you pay.
At the machine in Tuktoyaktuk where Gruben made his withdrawals, CBC verified that withdrawing $100 costs $2.50, $300 costs $3, and withdrawing $600 will indeed set you back $6.
"We don't see it a lot," says Curt Binns, the executive director of the ATM Industry Association's Canadian chapter, of the North West Company's sliding scale fee structure.
The association represents banks, private ATM owners and other companies that service the machines.
Of the $6 fee paid by Gruben, Binns said, "That would be very high if it's a single transaction."
According to the Financial Consumer Agency of Canada, fees charged by private ATM operators range from $1.50 to $5, though the agency notes that "they are not required to adhere to a minimum or maximum limit."
No rules on how much ATMs can charge
That caveat from the agency helps explain prices in the North, where many communities do not have a bank and where the selection of ATMs is small.
It's sort of like internet or telecom service in the North in that there isn't much choice in some areas, except with one crucial difference: while the CRTC regulates some internet and telecom fees charged by Northwestel, no such regulation applies to private owners of "white label" ATMs in the North.
Though it's been pressured by the NDP to cap withdrawal fees at bank-owned ATMs across Canada at 50 cents per transaction, the federal government imposes no limit. Instead, banks regulate themselves. (At three banks sampled in downtown Yellowknife, the withdrawal fee was the same: $3.)
In the N.W.T., the territorial government says it's not aware of any legislation regulating transaction fees at white-label ATMs in the territory, though the Department of Municipal and Community Affairs says it provides free and non-binding mediation service to customers who want to complain about a service or product.
Why such high fees?
CBC asked the North West Company to outline the costs of operating and maintaining its ATM machines. The company did not provide such details, though it wrote back that, technically speaking, customers do have a choice. They can eject their card and walk away.
"The fee amount is displayed on the screen of the ATM and the cardholder must acknowledge their agreement of the fee before the transaction is finalized and cash dispensed," said Cinthya Clark, a spokesperson for the North West Company.
Binns, with the ATM Industry Association, says ATM owners have several factors to keep in mind when setting their prices. Money collecting dust in an ATM machine doesn't earn interest, for one thing. Plus there's the cost of physically putting the cash in the ATM — which, in places like Tuktoyaktuk, means flying it in by plane.
"The guy that's operating in the remote [North] is going to have different costs than someone in Vancouver," said Binns.
"If you're in downtown Toronto and you're on a corner and across the street is the bank that you deal with, cash-on-transit is not a big issue. Geography plays a big part in providing that convenience."
Gruben is aware of Tuktoyaktuk's other ATM machine, at the Stanton grocery store. The store is owned by the Inuvialuit Development Corporation, and charges a flat fee of $2. Still, Gruben says he's considering speaking to Nunakput MLA Jackie Jacobson, or maybe even Finance Minister Michael Miltenberger, about ATMs.
And he mentions a third possible option.
"Maybe I should open one."