Decision #22113-136Q307

File: 22113-136Q307

Commissioner’s Decision

Compliance issue

Cost of borrowing — Failure by a bank to issue a written statement outlining the changes it had made to a credit card agreement, at least 30 days before the changes came into effect
Bank Act, paragraph 452(2)
Cost of Borrowing (Banks) Regulations, paragraph 6(6)(c) and subsection 12(3)

A consumer had difficulty meeting the minimum payment requirements for her credit card, which resulted in the bank increasing the interest rate on her card. The bank notified the consumer of the anticipated interest rate increase by means of a message on her credit card statement. The message indicated that the higher interest rate would apply to her credit card account starting the day after the bank issued the next month’s statement.

Under subsection 12(3) of the Cost of Borrowing (Banks) Regulations, if a credit card agreement is amended, the bank must inform the borrower about this, in writing, at least 30 days before the amendment takes effect.

The Financial Consumer Agency of Canada (FCAC)’s Compliance and Enforcement Branch investigated the matter and found that this was a systemic issue, which involved not just this customer but also a number of other consumers, and had resulted in several incidents in which the bank did not provide clients with the 30-day advance notice prior to the amendment taking effect, as required by the Regulations.

Decision taken

FCAC issued a Notice of Violation.Footnote 1 

Compliance considerations

A bank may modify its credit card agreements, as long as it notifies consumers, in writing, of this change at least 30 days before the change takes effect. Although the Regulations provide some exceptions to this advance notice requirement, none of the exceptions applied in this situation. The bank’s process to notify consumers of a change to their credit card agreement consisted of a message about the upcoming change, which the bank included in the monthly statements it sent customers.

Since the 30-day notice period — outlined paragraph 6(6)(c) of the Regulations — is based on the assumption that any advance disclosure sent by mail would result in a delay in providing notice to consumers, the bank must also factor into its process five days for delivering notices by mail, as well as other time required to cover delays in preparing and printing customer statements.

Although the bank did provide clients with advance notice of its interest rate amendment, it did not do so in the manner specified by the Regulations.

Measures taken by financial institution

As a result of FCAC’s intervention, the bank implemented changes to ensure that the process for advising clients of amendments to the interest rate on their credit card would comply with the 30-day notification period set out in legislation.


The Cost of Borrowing Regulations are intended to ensure that cardholders are informed of changes to their credit card agreement before these changes take effect. Consumers who receive proper notice of amendments to their credit card agreement are better able to weigh their options and choose the financial institution, as well as the financial products or services, that suit their needs and their banking habits. In the present case, FCAC ensured that credit card holders were informed properly of changes to their credit card agreement and given the time required to adjust to these changes.

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