KINGSTON, Jamaica — Opposition Senator Alan Bernard has argued that the soon-to-be established Jamaica Consumer and Competition Authority (JCCA) should be empowered to address the vexed issue of banking fees.

Bernard made the argument in the Senate on Friday, during his contribution to the debate on the JCCA Bill that will establish the authority, while replacing the Consumer Affairs Commission (CAC) and the Fair Trading Commission (FTC). The bill, which was piloted by the Minister of Industry, Investment and Commerce, Senator Aubyn Hill, was eventually passed with three amendments.

Bernard told the Parliament that if the market itself is producing practices that adversely affect consumers, this new authority should be capable of studying that market through both the consumer-protection and competition lenses.

“The bill already empowers the authority to collect and analyse information concerning trade and to undertake studies and reports on competition and consumer interests. Banking fees are an obvious candidate for that kind of examination,” he stated.

He said such examination is not about arbitrarily setting bank prices, undermining the Bank of Jamaica (BOJ), or to prevent legitimate cost recovery. Rather, he said it was to determine whether the market is working fairly for consumers.

“Because a $200 fee here, a $300 fee there, a transaction charge, a service charge [or] an account charge may individually appear small. But to a pensioner, a minimum-wage worker, a small business operator or a household already struggling with the cost of living in these perilous times, those charges accumulate,” said Bernard.

“And the fact that an individual amount may be too small to justify expensive litigation is precisely why strong consumer institutions matter,” he added.

The Opposition lawmaker asked Senator Hill to clarify the jurisdiction over regulated financial services.

“Can a consumer challenge a banking term or fee before the Jamaica Consumer and Competition Authority and, ultimately, the Consumer and Competition Tribunal on the ground that the term is manifestly unfair to a consumer?” Bernard asked.

He said if the answer was yes, it should be stated clearly and, if no, it should be made clear which institution has jurisdiction, to determine the substantive fairness of that fee, and not merely whether it was properly disclosed.

Bernard told the Parliament that the success of the Bill cannot be measured by whether two institutions have successfully become one.

“It must be measured by whether the Jamaican consumer becomes more powerful in the marketplace; whether the consumer has greater access to redress; whether unfair practices are easier to challenge; and whether powerful suppliers are more accountable,” he insisted.

He said banking fees provide a useful test in this regard.

Bernard reiterated that the merged authority should be used to test against what he described as “the real and persistent concern” for Jamaican consumers — banking fees and charges.

“This, because banking provides perhaps one of the clearest examples of why consumer protection and competition must work together,” he said.

Bernard pointed to Section 24 of the Bill which gives the Consumer and Competition Tribunal the power, in matters arising under the Consumer Protection Act, to modify a term or condition in an agreement that is considered “manifestly unfair to a consumer”.

He asked whether this applies when the service is a banking service. If it does not, Bernard said Parliament needs to identify who determines whether a banking term or charge is manifestly unfair. He stressed that he was not arguing that banks should not charge fees since they provide services which come with a cost and are also entitled to operate profitable businesses.

Senator Bernard said the issue is: “When does legitimate cost recovery become an unfair, unreasonable or a disproportionate charge against a consumer who has very little bargaining power?”

When he closed the debate, Senator Hill pointed out that consumers who take issue with banking fees or any other service offered by banks usually take their complaints to the BOJ.

— Lynford Simpson