Protection will come into effect on June 30 as part of Canada’s new financial consumer protection framework.
Ottawa, On, June 30, 2022 – Beginning June 30, Canadians will benefit from new and enhanced protection in their transactions with banks. Protection fulfills the federal government’s commitment to introduce a new financial consumer protection framework (framework) in 2018. Banking Act..
The framework requires banks to maintain higher standards and take greater responsibility for consumer outcomes. For example, we need to provide more information to our customers so that they can strengthen their grievance procedures and make informed and timely decisions. The framework also requires banks to meet higher standards in their sales practices, including providing products and services to their customers that are appropriate based on their financial needs and circumstances.
With the new and enhanced protections coming into effect on June 30, banks need to:
- Respond to customer complaints within 56 days. This is the first time a bank is required by law to deal with a complaint within a specific time period.
- Make sure that the payment method to your employees does not interfere with your new obligation to provide and sell the right products and services to your customers.
- Send electronic alerts to your customers to avoid overdrafts and spending beyond your credit limits. This can result in fees.
- Please let us know in advance so that the customer can decide whether to update or cancel the product or service.
- We offer separate contracts for each product and service so that you can understand what your customers are buying, how much it will cost, and how to cancel the contract.
- Observe broad protection against providing misleading information and using compulsory sales practices.
In addition, banks need to create a whistleblower program to encourage employees to move forward if they become aware of a problem. Bank employees are often the first to know about a problem and help identify problems that might otherwise not be reported. Bank employees can also report fraud to the Canadian Consumer Affairs Agency (FCAC) or the Financial Institutions Regulatory Authority (OSFI).
FCAC is a federal regulatory agency responsible for overseeing and enforcing compliance with banks’ market conduct obligations, including the newly enhanced protection of the framework. Banks, licensed foreign banks, and federal credit unions must comply with the framework. The new framework is based on extensive consultation and addresses issues raised by FCAC in past reviews of the banking industry.
Canadians can visit www.canada.ca/FCAC to learn more about the framework’s new and enhanced protection.Multimedia
New and enhanced protection for banking customers
“The financial well-being of Canadians is very important and we are taking more action to protect people in our transactions with banks. Canada’s new financial consumer protection framework has more than 60. It includes new or enhanced protections that give Canadians more confidence and peace of mind in managing their money. “
Prestigious Chrystia Freeland, Deputy Prime Minister and Minister of Finance
“Canada’s Financial Consumer Affairs Agency is there to protect consumers of financial products and services, but this is also a shared responsibility of the financial industry. Canada’s new Financial Consumer Protection Framework is for banks to customers. It’s an important milestone for Canada’s consumer protection in that it increases its responsibility to focus on economic outcomes. In today’s increasingly complex and rapidly changing financial world, frameworks further protect Canadians. And will empower. “
Judith Robertson, Commissioner of the Financial and Consumer Affairs Agency of Canada
- The role of the Canadian Financial and Consumer Affairs Agency (FCAC) is to protect financial consumers by strengthening the financial literacy of Canadians and overseeing compliance with the legal obligations, codes of conduct and commitments of federal regulators, including banks. That is.
- In 2018, the Government of Canada adopted a law introducing a new financial consumer protection framework (framework). Banking Act To further empower and protect financial consumers in dealings with banks.
- The law that created the framework also gives FCAC more authority to better protect Canadians in dealings with banks. This includes the compulsory nomenclature of the bank that violated it, the power to impose high penalties on the bank that violated the legal obligation, and the authority to instruct the bank to take action to comply with the legal obligation. included. The new FCAC authority came into effect in April 2020.
- Budget 2022 will strengthen the external grievance system and introduce targeted legislative measures to establish a single non-profit external grievance body to address consumer complaints involving banks. Announced the government’s intentions. The legislative amendment will soon be part of Budget Enforcement Act No. 2.
New and enhanced protection for banking customers
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