Decision #59113-049Q307

File: 59113-049Q307

Commissioner’s Decision 

Compliance issue

Cost of borrowing — Failure by a bank to provide borrowers with periodic supplementary disclosure statementsFootnote 1  in accordance with the Cost of Borrowing (Banks) Regulations, subsection 12(5) and paragraphs 10(3)(a), (d) and (e)

A consumer contacted the Financial Consumer Agency of Canada (FCAC) and complained that the monthly credit card statements he received from his financial institution did not indicate the interest rate that applied to his account.

Subsections 10(3) and 12(5) of the Cost of Borrowing (Banks) Regulations require federally regulated financial institutions that issue credit cards to provide borrowers with monthly statements that specify the time period the statement covers, the interest rate that applies for the billing period and the amount of credit that is available at the end of that period.

FCAC’s Compliance and Enforcement Branch conducted an investigation into the matter, which revealed that the bank had failed to disclose, in the monthly statements it was sending to customers for a particular credit card product, the three items indicated above, as required by subsection 10(3) and 12(5) of the Cost of Borrowing (Banks) Regulations. 

Decision taken

FCAC issued a Notice of ViolationFootnote 2  with a proposed penalty of $25,000. The bank paid the penalty without making any representations to FCAC’s Commissioner, as permitted under FCAC’compliance framework, and FCAC closed the file.

Compliance considerations

Disclosure of the interest rate that applies

The bank did not disclose to consumers, as required by the Regulations, the annual interest rate that applies each day of the billing period. Instead, the bank only told consumers what this rate was when they entered into a credit agreement with the bank for their credit card account.

Disclosure of the time period the statement covers 

The original monthly statement that the bank provided to consumers only showed the end date of the period the statement covers (that is, the statement date), but did not disclose the start date.

Disclosure of the amount of credit available at the end of the period 

The bank did not explicitly disclose, in its monthly statements, the amount of credit that was available at the end of the billing period.

Despite the fact that the Cost of Borrowing (Banks) Regulations had come into effect in September 2001, the bank failed to provide proper disclosure since that time. 

Measures taken by financial institution

As a result of FCAC’s intervention, the bank modified its monthly statements to add the information that was missing. As a first step, the bank included, in its statements, the interest rate that applied; instructions for determining the period of time the statement covered; and the amount of credit that was available at the end of the billing period. Eventually, the bank redesigned its statements to incorporate all three disclosure items that were missing and that were required by the Regulations. 


In the present case, FCAC’s intervention helped identify and correct a situation in which credit card holders were not receiving important information that they were entitled to have, about their account. With this information in hand, consumers are better able to monitor their credit card accounts and make sound financial decisions.

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