Giving your express consent for financial products and services
What express consent means
Express consent means that you must clearly agree to a financial product or service in writing or verbally before a bank or other federally regulated financial institution (financial institution) can sell or provide it to you. This includes products such as a credit card, a line of credit, and loans.
Why express consent matters
If a financial institution provides you with a financial product or service for which you didn’t give your express consent, it may affect you in the following ways:
It may cost you money.
You may be charged fees for products or services that you didn’t agree to, don’t know about or don’t need.
It may affect your credit score.
Every time you sign up for a credit product or your credit limit is increased, it can affect your credit score. And if you didn’t expressly agree, your credit score and your ability to borrow money in the future may be affected without you knowing.
Your right to clear communication during the sales process
During the sales process, the financial institution’s communication with you must be clear, simple and not misleading. It must be clear to you that the financial institution is seeking your agreement to provide or sell you a financial product or service. For example, your bank can’t get you to agree to receive a reward or promotion such as a T-shirt or reward points, and use that agreement to also provide you with a credit card.
It’s important to note that your use of a product or service does not equal express consent.
Many financial institutions have outsourced the sale of certain products, such as credit cards, to third parties. These third parties are commonly found at places such as:
- grocery stores
- sporting events
- university and college campuses
- gas stations, and
- coffee shops
Third party sellers must follow the same rules that the banks do, which means they must get your express consent before selling or providing you with a financial product. It also means they have to communicate with you in a way that’s clear, simple and not misleading. It has to be clear to you what you’re signing up for.
If you agree verbally to a financial product or service, the bank must confirm with you in writing, as soon as possible, that you agreed to the product or service.
Express consent for new or optional products and services
You must agree before a financial institution can provide you with any of the following:
- New product or service, for example:
- a credit card
- a loan
- a line of credit
- Optional product or service, added for a fee to another product or service that you already have, for example:
- insurance for your credit card debt (also called credit balance insurance or balance protection)
- insurance for a loan or line of credit
- insurance for a mortgage
Before you agree to an optional product of service, a financial institution must provide to you:
- A written or oral disclosure statement with the following details:
- a description of the product or service
- how long the agreement will last
- the conditions under which you may cancel the product or service
- all related charges, or the method used to calculate them, along with examples
If you agree verbally, the financial institution must give you, as soon as possible, written confirmation of your consent for the new product or service. The bank may provide this confirmation electronically, if you choose.
Promotional offers on optional products and services
Financial institutions often use promotional offers for an optional products or services to encourage you to sign up. These are often called preferential, introductory or special offers.
Some offers may end after a set period of time, such as after 3 months. If this is the case, the financial institution must notify you at least 30 days before the date the promotional offer ends and notify you about what charges will apply when the promotional offer ends.
Other offers may expire after a set amount of use, such as 10 times. If this is the case, the financial institution must tell you as soon as possible after the promotional offer ends that the offer has ended and how charges will be determined if you keep using the optional product or service.
How to make a complaint
If you received a financial product or service without agreeing to it, including an optional product or service, contact the Financial Consumer Agency of Canada.
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