Your banking rights and upcoming new protections
Current protections for bank customers
Under current federal laws and regulations, banks must comply with consumer protections. These protections help to ensure Canadians have access to basic banking services and are treated fairly in their dealings with banks.
They include your right to:
- open a personal account at any bank
- cash a Government of Canada cheque for free at any bank with proper identification
- receive clear and simple information that is not misleading about the products and services banks offer you
- only get products and services you’ve provided express consent to
- have your issues resolved through a bank’s complaint-handling process
New and enhanced protections
As of June 30, 2022, you’ll benefit from new and enhanced protections in your dealings with banks.
The protections are part of Canada’s new Financial Consumer Protection Framework (the Framework). They apply to customers of banks, authorized foreign banks and federal credit unions.
Banks will 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.
For example, banks will have to provide:
- new electronic alerts to help you avoid missing payments or spending over your credit limit, which can lead to unnecessary fees
- timely reminders to help you decide if you want to renew or cancel your products or services, including information on any rates or fees that apply
- separate agreements for optional products and services, such as credit card insurance, to help you better understand how they work, how much they cost and how to cancel them
Enhanced complaint-handling procedures
All banks must have procedures to handle complaints and resolve customer problems. They include access to an independent and impartial review by an external complaints body (ECB). You have a right to bring your complaint to an ECB when your bank has not been able to resolve it in a timely way or if you are unsatisfied with the bank’s response.
Under the Framework, banks and ECBs will have to strengthen their complaint-handling procedures.
One important new requirement is that banks will have to deal with your complaint within a specific period – 56 days.
The changes will help you get your issues resolved in a more timely and effective way.
Other measures to better protect bank customers
The Framework will better protect you in several other important ways.
For example, it includes new obligations on banks, such as having to:
- offer and sell you products or services that are appropriate for your financial needs
- provide you with a refund for charges or penalties that were not disclosed to you, or that you didn’t agree to
Banks will also have to improve existing protections that prohibit them from:
- misleading you or applying undue pressure when selling you products and services
- providing you with products or services without first getting your express consent
Banks will also have to improve their business practices, such as:
- setting up a whistleblowing program for their employees to report wrongdoing
- designating a committee of their board of directors to make sure that they’re complying with their obligations to their customers
Banks will also have to cash, free of charge, Government of Canada cheques of $1,750 or less with proper identification. The current maximum amount is $1,500.
Canada’s new Financial Consumer Protection Framework
In 2018, the Government of Canada adopted legislation to modernize the Financial Consumer Protection Framework in the Bank Act. The Framework introduces new and enhanced protections to advance your banking rights and interests, which will take effect on June 30, 2022.
The legislation also provides the Financial Consumer Agency of Canada (FCAC) with more 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:
- impose a penalty of up to $10 million on banks that commit serious violations of their legal obligations
- direct banks to take actions to comply with their legal obligations
- direct banks to undergo a third-party, independent audit to comply with their legal obligations
The Framework addresses issues raised by FCAC in its reviews of the banking industry. The reviews highlighted key areas where consumers of banking products and services could be better protected, and the oversight of banks could be strengthened.
The Framework is also based on extensive consultations with stakeholders across Canada.
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