Decision #52219-505Q203

From: Financial Consumer Agency of Canada

File: 52219-505Q203

Compliance issue

Cost of Borrowing — Failure to disclose the annual percentage rate (APR) of a loan in an advertisement
Bank Act, s. 453
Cost of Borrowing (Banks) Regulations, s. 19(1)

A bank failed to disclose the annual percentage rate (APR) for a mortgage in its advertisement.

Subsection 19(1) of the Cost of Borrowing (Banks) Regulations stipulates that a bank that advertises a loan involving a fixed amount and which mentions the interest rate, must also disclose the APR and the term of the loan. The APR must be displayed at least as prominently as the representation and in the same manner, whether visually or orally or both.

Compliance measure taken

A Letter of ReprimandFootnote 1  noting one violation against the bank.

Compliance considerations

The problem was isolated to one branch and as such was determined not to be systemic. The bank removed the advertisement the same day it was made aware of the problem by FCAC. There were no previous violations of these particular Regulations noted against the bank.

Corrective measures taken by financial institution

  • Removed the advertisement the same day the bank was contacted by FCAC.
  • Sent an e-mail to all branches and internal units of the bank.
  • Sent an e-mail to all regional district branches advising them of the regulatory requirements.
  • Required all promotional material to be approved by the area manager.
  • Held a staff meeting at the branch where the advertisement originated to ensure that all staff fully understood the regulatory requirements.
  • Branch staff reviewed the Cost of Borrowing (Banks) Regulations training material.
  • Enhanced its Intranet site to include information about the Regulations.


It is important that consumers receive all the necessary information before making a decision to purchase a financial product. In this case, it was important that consumers be provided with key information pertaining to the cost of the loan. Informed consumers are in a better position to choose the financial institution and financial product or service that best suits their needs and banking habits. Facilitating comparison-shopping encourages healthy competition between financial institutions and promotes growth and innovation in the marketplace.

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