Decision #91314-750Q204

From: Financial Consumer Agency of Canada

File: 91314-750Q204

Laurentian Bank of Canada (Laurentian Bank)

Nature of violation

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

According to section 453 of the Bank Act, no person shall authorize the publication, issue or appearance of any advertisement in Canada relating to loans, credit cards, payment cards or charge cards offered to natural persons by a bank, unless the advertisement contains such information as may be required by the Regulations.

Section 19(1) of the Cost of Borrowing (Banks) Regulations states that a bank that advertises a loan involving a fixed amount of credit in an advertisement that makes a representation of the interest rate, must disclose the annual percentage rate (APR) and the term of the loan.

Laurentian Bank had advertisements in its retail branches that represented an interest rate on a mortgage without disclosing the term of the loan, as required by the Regulations.

Administrative monetary penalty

An Administrative Monetary Penalty of $30,000 was imposed against Laurentian Bank for not properly disclosing information in its advertising, as required by the Regulations.

Corrective measures taken by financial institution

Immediately following FCACs intervention, Laurentian Bank removed the advertisements from its branches. Laurentian Bank also amended its internal policies on in-branch advertisements to ensure future compliance with the Regulations.

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