Royal Bank sparks backlash with fee hikes in the Caribbean

Royal Bank is the only big Canadian bank that hasn't announced any personalbanking fee hikes in thiscountry this year.But it'sstill facing the wrath of customersin the Caribbean.

Some RBC Caribbean clientsare so upset over new monthlycharges, they lined upfor hours to close their accounts.

"Customer exit continues at Royal Bank," read one recentheadline on a local news storyabouta run on an RBC branch in St. Kitts.

"RBC customer pull-out spreading throughout the region,"announced anotherarticle.

• Canada's major banks hiking fees while pulling in big profits
• Royal Bank backs down on fees for credit card, mortgages

RBCwouldn't confirm detailsto CBC News, but it appears that customers in at least seven Eastern Caribbean countriesincluding Antigua and Barbuda, St. Lucia, St. Kitts and Nevis, and St. Vincent and the Grenadinesare now facing a monthly charge of 25 East Caribbeandollars($11.75Cdn)for some personal bank accounts.

Seniors with anRBCSixty Plus account will be charged a $12.50 XCD ($5.88Cdn) monthly fee.

Minimum wage in St. Kittsis $4.23Cdnan hour, the highest minimum wage amongthe countries affected.

The bank rolled out the new charges between May 23 and June 20 at a time when it'senjoying multi-billion-dollar profits. Numbers released at the end of May showedRBCboosted itssecond-quarter profitby three per centto $2.57 billion Cdn.

Fees that bite

So many people chose to closetheir accounts, police inSt. Kitts and Nevis evensent out analert, urging RBC customers to use caution when withdrawing their money.

"Keeping it around the home, office, under the bed, or on your person and not in another financialinstitution is not a wise choice," the alert said.

MelisaBoutin, an RBC customerwho lives in New York but keeps someofher money in a branchin St. Kitts, says the new fee is just too high for the averagecustomer.

"Going from zero to $25 XCDis too much," she said. "They should have expected this kind of backlash."

Boutinsays sheplans to close her account the next time she visits St. Kitts, where she grew up.

She says she has spokenwith friends on the Caribbean island who joined the rush to pull out of RBC.

One friend lined up for four hours, Boutin said. Another chose to avoid the crowds and withdrew all her cash from an ATM.

"People feel it's a money grab on the part of Royal Bank," said Boutin. "There's no better service coming with that."

Services such asonline and mobile banking, for example, have been slow in coming for RBC'sCaribbean customers,she claims.

The bank has branches in 17 Caribbean countries and territories, where it serves more than one million customers.

The fees sparked such anger in the Caribbean,politicians evenweighedin.Timothy Harris,the prime minister of St. Kitts and Nevis, said his governmentregretted "any inconvenience or hardship caused to our public" because of the charges.

He alsourged theEastern Caribbean Central Bank to expedite its plan to examine commercial bank fees.

RBC has acknowledgedthe backlash.

"We recognize that recent changes to our service fees in the Caribbean are causing concern among some clients in the region," spokesmanA.J. Goodman told CBC News inan email.

He said RBC adjusted some fees in parts of the Caribbean "to reflect the cost of doing business in these countries."

The bank continues "to deliver good value and competitive pricing" in the region, he said.

Some learned of fee on social media

RBC's explanation doesn't comfort Boutin, who works as a financial educator.

"If you have to introduce a fee to improve your bottom line, I can understand that.But I don't think that they have their customers in mind," she said.

She claimscustomers like her weren't properly notified about the charges. Boutin learned about the $25 XCD fee onFacebook,just days before it took effect.

A friend announced the news on the social media site after learning about thechargefrom an RBC bank teller.

"Please don't be a victim of this ripoff," the friend wrote on Facebook. "Spread the word!"

RBC says it notified customers through several channels, including by letter "in some cases," in branchesand on its website.

Last year, new fees for CanadianRBC customerswere also met with an outcry from the public and politicians so much so that the bank axed them before they took effect.