Express consent for financial products and services: know your rights
What is express consent
Express consent means that federally regulated financial institutions must get your permission before providing financial products or services to you. This applies to all products and services such as credit cards, lines of credit and loans.
They can obtain your consent verbally or in writing. If you give verbal consent, they must provide you with confirmation, in writing, without delay.
Why express consent matters
If a financial institution provides you with a financial product or service you didn’t consent to, it may:
- cost you money. They may charge you fees even if you didn’t agree to it, don’t know about it or don’t need it
- affect your credit score. Every time you sign up for a credit product or increase a credit limit, it can affect your credit score. If you didn’t provide consent, this may affect your ability to borrow money in the future without you knowing
Your express consent for products and services
Federally regulated financial institutions’ communication with you must be clear, simple and not misleading. It must be clear to you that they’re seeking your express consent to provide you with a financial product or service.
Using a product or service doesn’t count as express consent.
Third party sellers
Many financial institutions use third parties to sell certain products and services, such as credit cards. You usually see third parties at places like:
- grocery stores
- sporting events
- university and college campuses
- gas stations
- coffee shops
They must follow the same rules as federally regulated financial institutions. They must get your express consent before providing you with a financial product or service. It also means they must communicate with you in a manner that is clear, simple and not misleading. It must be clear to you what you’re signing up for.
A federally regulated financial institution must get your express consent before providing you with any of the following:
- a product or service, for example a:
- credit card
- line of credit
- an optional product or service, added for a fee to a product or service that you already have, such as:
- insurance for your credit card (also called credit balance insurance or balance protection)
- insurance for a loan or line of credit
- insurance for a mortgage
Your express consent for optional products and services
Before you consent to an optional product or service, banks must provide a separate disclosure statement to you.
For example, when you provide your express consent to get a credit card, they can’t use the same consent to provide you with credit balance insurance. Two forms of express consent are required, 1 for each product or service.
If you consent verbally, they must give you written confirmation of your consent. They must do so without delay. They may provide this confirmation electronically if you agreed to receive it this way.
The disclosure statement must include:
- a description of the optional product or service
- the term of the agreement
- a list of all charges, or the method used to calculate them, with an example
- how and when you may cancel the agreement
- when cancellation will take effect
- the fact that they’ll refund or credit any amount they received for any part of the product or service you didn’t use
- the date when you can use the product and the date when charges apply, if different
- the steps to take to use the product or service
Your right to be notified when promotional offers end
Financial institutions may offer you promotional or other offers to encourage you to sign up for a product or service. They may call them preferential, introductory, or special offers.
Such offers may end after:
- a set period, such as after 3 months, or
- a set number of uses, such as after 12 uses
Offers that expire after a set period
Banks must disclose to you on which day you’ll no longer benefit from the offer. If you continue to use it after that day, additional charges may apply. However, they must get your express consent to impose additional charges, within 5 business days of applying them.
Federally regulated financial institutions other than banks must disclose to you, no less than 30 days before the expiry date:
- the date that the offer will end
- the charges that will apply if you continue to use it after that date
Offers that expire after a set number of uses
Banks must disclose to you, after the last use, the fact that you no longer benefit from the offer. If you continue to use it after the last use, additional charges may apply. However, they must obtain your express consent to impose any additional charges. They must do so immediately after that last use.
Federally regulated financial institutions other than banks must disclose to you after the last use:
- the fact that the offer has come to an end
- the method of imposing charges if you continue to use it
Receiving a product or service without your express consent
If you receive a financial product or service without consenting to it, you can file a complaint with your financial institution. You can also contact the Financial Consumer Agency of Canada.
When these rights apply to you
These rights apply when you’re dealing with a federally regulated financial institution like a bank or federal credit union.
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