Decision #103

Commissioner’s reasons for decision

(FCAC ACT, subs. 23(2))

The Bank


In November 2007, the Acting Commissioner issued and caused to be served a Notice of Violation pursuant to subsection 22(2) of the Financial Consumer Agency of Canada Act (the Act). The Notice stated:

. . . I have reasonable grounds to believe that the Bank has committed one violation by failing to comply with subsection 6(4) of the Cost of Borrowing (Banks) Regulations that requires disclosure statements to be in plain language that is clear, concise, and presented in a manner that is logical and likely to bring to the borrower’s attention the information required by the Regulations to be disclosed.

The Acting Commissioner proposed to impose a penalty of $5,000 for the violation. The Bank responded to the Notice of Violation with its representations dated January 2008, as permitted under the Act.

After studying the file, including the representations of the Bank, on a balance of probabilities I have concluded that the Bank has not committed a violation.


The principle underlying the Cost of Borrowing (Banks) Regulations is that borrowers are entitled to clear and complete disclosure of all the terms of their borrowing so that there are no surprises at any stage. An agreement that contains inconsistent or conflicting provisions derogates from this principle.

In the present case, there is an inconsistency in the wording of two sections of the Bank’s credit card agreement, as noted in the compliance officer’s report.

The promotional offers section merely informs borrowers that they may receive offers of lower interest rates from time to time, and includes the caveat that a customer who accepts a special offer will be bound by the agreement and any additional terms offered.

However, an actual offer from the Bank includes information that is consistent with the minimum payments section of its credit card agreement.

I note that the Bank has indicated that it has revised the inconsistent section in its latest credit card agreement, and that all cardholders received the revised version.

Ottawa, February, 2008


Ursula Menke


Financial Consumer Agency of Canada

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