B-6 Investigations of unauthorized credit and debit card transactions


The new Financial Consumer Protection Framework (FCPF) in the Bank Act and the Financial Consumer Protection Framework Regulations (collectively: “FCPF Requirements”) come into force on June 30, 2022. The FCPF Requirements apply to banks, authorized foreign banks and federal credit unions. This bulletin will be reviewed, including for purposes of reflecting the FCPF Requirements, and will be reissued in due course as is appropriate. Starting June 30, 2022, this bulletin is to be read by banks, authorized foreign banks and federal credit unions in conjunction with, and subject to, the FCPF Requirements. If there is any inconsistency between the FCPF Requirements and this bulletin relating to banks, authorized foreign banks and federal credit unions and their conduct post June 30, 2022, the FCPF Requirements prevail.

This bulletin reiterates the expectations of the Financial Consumer Agency of Canada (FCAC) with respect to the investigations of alleged unauthorized credit and debit transactions. Federally regulated financial institutions (FRFIs) must take all relevant factors into account prior to finding a consumer liable, regardless of the method or technology used to process a credit or debit card transaction.

Specifically, FRFIs must investigate whether circumstances beyond the cardholder’s control resulted in an unauthorized transaction (such as shoulder-surfing, coercion, card theft, systems malfunction, etc.). FRFIs must not rely solely on authentication technologies to truncate or eliminate a comprehensive investigation of an alleged unauthorized transaction. For example, a finding of liability cannot solely be based on the fact that a transaction was completed using the correct chip-and-PIN combination.

FCAC will continue to scrutinize cardholders’ claims of unauthorized transactions and expects FRFIs to report on the specific investigative steps taken before issuing a finding of liability against a cardholder.

Thank you for your ongoing cooperation.

Thank you,

Brigitte Goulard
Deputy Commissioner
Financial Consumer Agency of Canada

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