Financial Literacy Newsletter – July 2022

Protecting the rights of financial consumers

A word from FCAC

New protections for bank customers

On June 30, Canadians started benefiting from new and enhanced protections when dealing with their banks. The protections are part of Canada’s new Financial Consumer Protection Framework (the Framework), which is an important milestone for consumer protection in Canada.

Among the benefits, the Framework will help bank customers to:  

• Make informed and timely decisions about their finances. For example, new electronic alerts will help them avoid going into overdraft or spending over their credit limit, which can result in fees.
• Get their bank complaints resolved in a more timely and effective way. For example, banks now have 56 days to deal with customer complaints.
• Receive products or services that are appropriate for them, based on an understanding of their financial needs and circumstances 

This newsletter is dedicated to sharing information about some of the new and enhanced consumer protection measures to make sure you are aware of the benefits and impacts, including a quiz to test your knowledge on the new Framework. To prepare you for the summer season, we will share some helpful tips on how the new protections can help you manage you finances while on holiday. Finally, we are also pleased to share with you an article from the Canadian Deposit Insurance Corporation about new deposit protection categories for RESPs and RDSPs.

To learn more about the Framework and the roles and responsibilities of FCAC, we invite you to check out our website. And as always be sure to browse through FCAC’s tools and resources, developed to help you manage your finances and strengthen your financial literacy.

Please help us raise awareness among Canadians about their new enhanced rights in their dealings with banks by sharing this newsletter with your network. Follow us on social media, on Facebook, Twitter, and Instagram. We are also on YouTube and LinkedIn.

Happy reading!

Three ways making a complaint to your bank just got easier

Confidence in Canada’s banking system depends on responsive and fair procedures for resolving customer issues. The Financial Consumer Protection Framework’s new consumer protection provisions require banks to strengthen their complaint-handling procedures.

Here are three ways that making a complaint to your bank became easier as of June 30, 2022:

1. Banks now have 56 days to deal with your complaint from the day you make it

Banks also have to provide written acknowledgement to you of the date on which the complaint was received and, as per FCAC expectations on timely referral, refer complaints not dealt with in 14 days to a designated employee.

2. The new legislation expands the definition of “complaint”

Banks now also have to treat any expression of dissatisfaction over a bank product or service or the way a bank product or service is sold or provided as a complaint.

3. Banks now have to help you navigate their complaint-handling process

Your bank now has to help you navigate their complaint-handling process. This is to make sure you understand the steps it involves. The steps include how to refer a complaint to an external complaints body.

FCAC’s role

Part of FCAC's role is to ensure that federally regulated financial institutions have a complaint-handling process in place. You can contact FCAC if you can't find information about your financial institution's complaint-handling process or if you're experiencing delays when using it.

Please keep in mind that FCAC doesn’t provide redress or compensation and can’t get involved in individual disputes.

Related links

• Video: Enhanced complaint-handling procedures for bank customers
• Video: New protections for bank customers
• How to make a complaint to a financial institution
• The Financial Consumer Protection Framework: Enhanced protection for bank customers

Just-in-time information can make a difference to financial success

Access to the right information can make all the difference to whether you make a good or bad financial decision. Financial literacy research also shows that when you receive information is almost as important as its content. Studies show that you are more likely to make good decisions when key information arrives “just-in-time”, right at the point when you are making a decision.

Banks now have to disclose more information to you about your day-to-day banking. This will help you make informed and timely decisions about your finances and protect you from financial harm.

Electronic alerts

As of June 30, 2022, banks are required to send new electronic alerts in 2 situations:

• When the balance of your chequing or savings account falls below $100 CDN (or an amount you have set)
• When the credit available on your credit card or personal line of credit falls below $100 CDN (or an amount you have set)

The goal of this new consumer protection is to help you avoid unnecessary fees. Your bank will automatically set the electronic alerts to $100. You may ask your bank to set them to a different amount.

Advance notice for the renewal of products and services

Your bank will send you timely reminders when some of your products and services are set to renew. This also applies to any automatic rollover or promotional offer that will expire. These reminders will help you decide if you want to renew or cancel your products or services. They will include information on any rates or fees that apply.

For products or services with terms of 30 days or more, you’ll receive 2 reminders:

• 21 days before the end of your term
• 5 days before the end of your term

If your term is less than 30 days, you’ll receive one reminder 5 days before the end of your term.

Separate agreements for optional products and services

As of June 30, 2022, your bank will provide you with a separate agreement for each optional product and service you agree to buy. The separate agreement must include:

• a description of the optional product or service
• the term of the agreement
• a list of all fees that apply
• the conditions to cancel the agreement
• the date the product or service is available for use
• the steps required to use the product or service

The new separate agreement will help you understand what you’re agreeing to buy, how much it will cost, and how to cancel an agreement.

To learn more about the Framework and the new and enhanced measures, please check out these related links:

• Video: New protections for bank customers
• Video: New electronic alerts from your bank
• The Financial Consumer Protection Framework: Enhanced protection for bank customers
• Your banking rights and new protections

Quiz: How well do you know the new consumer protections for bank customers?

Canada’s new Financial Consumer Protection Framework (Framework) came into force on June 30, 2022. The Framework introduces over 60 new and enhanced measures to protect Canadians in their dealings with banks. The Framework is an important milestone that will result in a higher standard of protection for financial consumers.

Take the quiz below to see how well you know the new and enhanced financial consumer protections that came into force on June 30th. To see the correct answer, click on the drop-down arrow.

1. You have the right to cash a Government of Canada cheque for free at any federally regulated bank. As of June 30, 2022, what is the new increased limit for cashing a Government of Canada cheque for free?

1. Up to $1,000
2. Up to $1,500
3. Up to $1,750
4. None of the above

2. As of June 30, 2022, banks are required to remind their customers that a promotional offer on one of their products is about to end:

1. 21 days before the end of your term
2. 5 days before the end of your term
3. 5 days before the end of your term if the term is less than 30 days
4. All of the above

3. As of June 30, 2022, banks are required to get your express consent before they provide you with a product or service. If you provide your consent verbally the bank must:

1. Record your voice and add it to your file
2. Provide you with a written confirmation that you have provided verbal consent
3. Consider your use of the product as enough to qualify as express consent
4. None of the above

4. As of June 30, 2022, banks are required to deal with customer complaints:

1. Within 56 days
2. Within 90 days
3. At the discretion of the bank
4. None of the above

5. The legislation also provided FCAC with new powers to better protect you in your dealings with banks. FCAC’s new powers came into force in April 2020. They include the power to:

1. Impose a penalty of up to $10 million on banks that violate their legal obligations
2. Direct banks to comply with their legal obligations
3. Direct banks to undergo a third-party, independent audit to comply with their legal obligations
4. All of the above

Leave financial stress behind while you’re on summer vacation

Tip: new consumer protections for bank customers will help

A vacation should be a time of rest and relaxation away from the hectic pace of work and daily life. But it can also become a time with a lot of expenses that may prevent you from enjoying the moment.

To make sure you don't ruin your vacation with worries about unexpected spending, prepare a budget for the activities you would like to do while on vacation. This way you can set limits on your spending, identify ways to reduce costs, ensure you spend within your means, feel in control and, most importantly, reduce your stress.

The same principles apply to a vacation budget as to your regular spending. Make a list of your planned expenses and divide them into needs and wants. Consider required expenses such as accommodation, food, gas, and travel insurance. Wants might include things like guided tours, boat rides and eating at the best restaurants. When considering the fun stuff, think about what’s important to you and what you can live without. Also, include a cushion for the unexpected. All this will allow you to better estimate how much money you’ll need and plan ahead to put that amount aside.

FCAC has a free, easy-to-use online budget planner that can help you prepare. And when you’re on your vacation, watch for new electronic alerts from your bank to help warn you about overspending. Since June 30^th, 2022, Canadian banks must send alerts to customers when they have $100 left in their chequing account or come within $100 of their credit card limit. You can contact your bank to customize this minimum amount, so you’ll receive a text, email or app notification if you go past it.

Overall, your vacation should be a time of relaxation and adventure and thinking about your spending in the planning phase can help it stay that way.

Learn more about FCAC’s Budget Planner to save for and manage your spending on your next vacation.

Deposit protection expands to RESPs and RDSPs

By Canada Deposit Insurance Corporation

CDIC welcomes RESPs and RDSPs as new deposit protection categories: Here’s what you should know

The Canada Deposit Insurance Corporation (CDIC) recently expanded its deposit protection. It now includes two new coverage categories, Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans (RDSPs), with each receiving separate coverage of up to $100,000.

The introduction of the RESP and RDSP coverage categories reinforces CDIC’s commitment to protecting the savings of Canadians planning for their future and means that even more of your hard-earned savings are covered.

If you haven’t heard of CDIC, let’s back up a little -

CDIC is the federal Crown corporation that contributes to the stability of the Canadian financial system by providing free and automatic protection of eligible deposits up to $100,000 (including interest) per coverage category at each of our member financial institutions.

Pheww - that’s a lot to take in, so let’s break it down.

What’s an eligible deposit?

Eligible deposits include cash in your chequing or saving accounts, GICs and other term deposits, money orders and bank drafts, certified cheques and foreign currency (eg. $USD). CDIC doesn’t cover mutual funds, stocks and bonds, Exchange Traded Funds (ETFs) or cryptocurrencies.

What’s a CDIC member institution?

Our members include banks, federally regulated credit unions as well as loan and trust companies. There are a couple of quick ways to find out if you bank with a CDIC member; search for your financial institutions name on our list of members or look for our purple lock logo in-branch, at ATMs, via online banking or on your mobile banking app.

How can I calculate my coverage?

Our deposit insurance calculator will guide you through a series of steps to get a better understanding of your personal coverage. If at the end you’re interested in discussing the coverage with, say, your financial advisor, no problem - you can send yourself a copy. CDIC doesn’t store this information so you can calculate any amount in privacy.

What are the different coverage categories?

• Tax-Free Savings Accounts (TFSAs)
• Registered Education Savings Plans (RESPs)
• Registered Disability Savings Plans (RDSPs)
• Registered Retirement Savings Plans (RRSPs)
• Registered Retirement Income Funds (RRIFs)
• deposits in one name
• joint deposits
• trust deposits

If you’re interested in learning more about CDIC, visit our website or follow us on Facebook, Twitter, LinkedIn or our recently launched Instagram page.

What's new

New financial literacy courses for teens

The Financial Consumer Agency of Canada (FCAC)  is offering two free gamified financial literacy courses for students in grades 6-12 to help boost financial knowledge and confidence. The courses will be available until winter 2023.

Student competition: Building better financial futures challenge

FCAC’s Building Better Financial Futures Challenge is a post-secondary student paper competition designed to promote the creation of actionable, evidence-based solutions to current financial challenges faced by vulnerable communities. The competition will open for submissions on September 1, 2022. The deadline to submit papers is April 30, 2023.

Now available: Affordable high-speed internet for seniors and low-income families

Through the Connecting Families initiative, Innovation, Science and Economic Development Canada is offering seniors and low-income families access to affordable high-speed internet. 

New resources to teach youth about inflation and how a bank note is produced

Bank of Canada Museum has introduced new, free resources, including its new Teaching Inflation Guide to get the conversation started with youth about inflation and its impacts on the economy and a video and discussion guide to explain how a bank note is produced.

Learn about your taxes with new online learning tool

The Canada Revenue Agency’s online learning tool, “Learn about your taxes”, has been updated with new content to help Canadians learn about taxes, benefits and credits, and how to complete their income tax and benefit return.

New scam alert page helps protect against fraud

The Canada Revenue Agency launched a new scam alert page to educate Canadians on the latest scams and how to protect themselves from fraud. 

Video series educates Canadians about Canada Pension Plan

Service Canada released a Canada Pension Plan (CPP) retirement pension video series to help Canadians learn about how the CPP works, how much money they can receive, as well as a quiz to see if they are ready for retirement.

ABC Life Literacy Canada offers new money management courses

ABC Life Literacy Canada has expanded its family financial literacy program with new money-related courses including Facing Money Challenges and Money Safety.