TD’s shocking fee hike for safety deposit boxes

TD Canada Trust is telling customers to pay 40 per cent more to rent a safety deposit box, starting April 1.

When banks raise service fees, customers get angry. But TD seems to be raising the anger quotient with the way it’s handling this news.

As Canada’s second largest bank, TD positions itself as customer friendly. It’s also profitable, earning $1.57 billion in the fourth quarter, including a rise in Canadian consumer profit of 17 per cent.

That has many people asking why rental fees for safety deposit boxes are going up so much.

The new annual fee is $60 to rent a small box (from $42.50), $85 for a medium box (from $60) and $125 for a large box (from $90).

Customers who lose a single safety deposit box key will pay $50 for a replacement (from $4.95). Those who lose both keys will pay a $200 drilling fee to open the box (from $104).

The bank gave no reasons, but talked about the need to review services and adjust pricing on a regular basis. That surprised some customers.

“I’d think that any time you increase anything by these percentages, common decency dictates you should be obliged to explain to the customers why this is necessary,” said Carl Hunter.

Safety deposit boxes are a highly valued service in branches, according to spokeswoman Barbara Timmins.

“We see huge demand — across many demographics — that actually outstrips supply. We haven’t changed fees in several years on safety deposit boxes and this pricing reflects the value that many of our customers see in them.”

Didn’t TD foresee an outcry when jacking up fees after years of stability? Many people would prefer small annual increases to a big catch-up increase.

“We know fees are a sensitive issue for many customers and we don’t make these decisions lightly,” Timmins said when asked to explain further.

“In this case, it’s been five years since we’ve changed fees. The new pricing is in line with the competitive landscape, which reflects the high value customers place on these highly secure storage spaces.”

When I checked other big banks’ websites, I found fees lower than TD’s. However, some may be planning increases as well.

To rent a small safety deposit box, RBC and Scotiabank currently charge $40 in annual fees. CIBC and BMO charge $45. (TD will go up to $60.)

To rent a large box, Scotiabank charges $85 a year. CIBC charges $100. RBC and BMO charge $125, the same as TD’s new rate.

As for other services, CIBC charges $15 to replace a lost key (compared to TD’s new rate of $49). CIBC also charges $100 to drill a box and replace lost keys (compared to TD’s new rate of $200).

Customers who feel forced to swallow the increases may be able to find secure storage at other banks.

You can open a safety deposit box at a financial institution without opening an account, says Julie Hauser, a spokeswoman for the Financial Consumer Agency of Canada (which regulates some banking services).

Banks make their own business decisions on offering safety deposit boxes and arranging for payments from people who don’t have accounts there.

Hauser advises asking your financial institution about banking packages that include a free or discounted safety deposit box.

Ivan Koh, who rents a large box, found no small or medium boxes available at his home branch. He’d have to go three kilometres to another branch.

“These increases are outrageous,” he said. “I’ve been a TD Canada Trust customer for many years, but I’ll likely be shopping the competition now.”

My advice to TD: If safety deposit boxes are popular, put more of them into your 300 branches. Increasing supply will impress customers more than trying to cut demand with double-digit fee hikes.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.