Can consumers be charged fees when using debit cards to purchase goods and services?

While it's still uncommon, you can likely bank on this becoming a more prevalent practice.

"I was recently making a purchase at a convenience store on Hamilton Mountain," Julius Sakalauskas recounts. "When I went to use my debit card, I saw '15 cents' printed on the face of the debit pad. Is this legal? If I'm paying cash, would they charge me for wear and tear on their cash register?

"I guess they are charged a fee by the debit machine operator or the bank or whoever for debit transactions. Is this a new trend? I know my bank has its transaction fees, but should we be doubly charged as consumers?"

You may have had a similar experience. I myself was charged $1 by a convenience store near North Bay. For years, we've paid charges and surcharges when using ABMs, sometimes totalling as much as $3 per withdrawal.

But the majority of us don't appear bothered, because Canadians are using automated bank machines (ABMs) and 'point-of-service' (POS) debits with increasing regularity.

Indeed, the debit card is used more frequently than cash.

"Your reader raises a good question, which other consumers have raised with us in the past," said Martine Belanger, acting external communications manager of the Financial Consumer Agency of Canada. "So we've added this question to our Frequently Asked Questions database," found at fcac-acfc.gc.ca by following the Consumers link.

"Bottom line? Yes, these charges are legal (in most cases) and to avoid paying any additional fees you should go elsewhere, or opt for another method of payment."

The Canadian government does not regulate debit card or ABM fees and the Interac Association only requires its members to disclose what charges consumers must pay.

You may be familiar with that Interac logo on the back of your debit and credit cards, but you likely don't know much about this non-profit company.

According to its website (interac.ca), the association was formed in 1984 by five major financial institutions.

Today, its members include "banks, trust companies, credit unions, caisses populaires, merchants and technology and payment-related companies."

Interac is responsible for the Inter-Member Network (IMN), which allows Canadians to access their money through ABMs and POS terminals (debit pads).

So who is entitled to your money?

Well, your financial institution (the card issuer) has likely sold you a service plan that covers monthly cash withdrawals from its own machines. Your service plan may also cover some withdrawals from ABMs operated by other financial institutions.

Use other ABMs often enough, however, and you will pay surcharges to these "acquirers."

An acquirer is the name given to Interac members that operate ABMs and POS terminals. These may be brand ABMs (with bank names), or non-brand.

Interac doesn't set its members' fees, but it does demand they are disclosed on the ABM or POS screen. If you don't agree with the amount of the fee, you should cancel your transaction and choose another payment method.

Merchants are not supposed to charge consumers their own fees for using debit pads. But the terms of their agreement with the owner-operator of the POS terminal may entitle them to a share of the surcharges.

"Debit surcharges are still uncommon," says Tina Romano, Interac's public relations manager. "If a consumer has any concerns (about the legitimacy of a fee), they should contact us and we'll contact the acquirer."

There are 55,000 ABMs across Canada and 46 per cent of Canadians say debit cards are their preferred method of payment, while only 28 per cent favour cash.

You can find a list of Interac members by following the Membership link at interac.ca. You can call 416-362-8550, or write info@interac.ca.

Banks invest in their own ABM networks for the use of their customers, said Canadian Bankers Association media relations manager Melanie Minos.

"They allow non-customers to obtain funds from their machines, but it is done as a convenience. And a fee is charged so that the bank's own customers are not subsidizing the use of those machines by customers of other banks. Every time a consumer does a transaction at a machine not owned by their bank, they are given the option of paying the fee or cancelling the transaction."

If you have a consumer problem, call 905-526-4665 or e-mail amacrury@thespec.com. Not all calls and letters can be answered.