A comprehensive audit should be done on Canada's big banks to determine whether they're profiting excessively through service fees or credit card rates, says Democracy Watch.

A comprehensive audit should be done on Canada's big banks to determine whether they're profiting excessively through service fees or credit card rates, says the Ottawa-based advocacy group Democracy Watch.

Democracy Watch issued its call for an audit Tuesday as the last of Canada's big banks, Scotiabank, reported healthy earnings in the most recent quarter.

"Every dollar of excess profit that banks gouge out of Canadian consumers hurts spending and job creation," Democracy Watch co-ordinator Duff Conacher said in an interview with CBC News Tuesday.

On Tuesday, the Bank of Nova Scotia reported quarterly profit had tripled from a year ago. Earlier this month, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce easily beat analysts' expectations, with quarterly profit of $1.01 billion and $644 million, respectively.

When combined with results of the other three big banks, total profit added up to $4.6 billion in the fourth quarter.

"The audit we're calling for would look at every division and the profit margin for each division," said Conacher. "If the profit margin is excessive, then the fees charged in that division would have to come down."

Conacher classified excessive profit as anything over 15 per cent. The average corporate profit is between 10 and 15 per cent, he said.

"Anything above that is gouging," he said.

Conacher gave several examples of what he considered unfair fees.

When a person travels abroad and uses a credit card for purchases, the credit card company charges the bank a one-per cent fee to convert the currency. The bank, however, charges 2.5 per cent to the customers.

"That's a 150 per cent profit for doing nothing," said Conacher.

Another example is how interest is charged on credit cards. A person with a $1,000 balance on a card will be charged interest on the full $1,000 even if the customer pays off a portion of that amount before the due date.

"Banks provide a great service, but is it at a fair price?" Conacher asked.

Last month, federal Finance Minister Jim Flaherty released a voluntary code of conduct for the credit and debit card industry to ensure transactions are conducted in a fair and transparent manner. It's an attempt to reduce transaction costs for stores and merchants.

Conacher said the voluntary code of conduct does nothing to cap credit card interest rates and protect consumers from unfair fees.

"It's been an issue for 20 years — either with service fees or credit card fees," he said.