The new rules took effect late last month to create stronger protections for consumers when it comes to Canada’s banking system, but some advocates said the new regulations don’t go far enough.
“These rule changes are baby steps to make things a little bit better,” said Duff Conacher of Democracy Watch, a corporate responsibility advocacy group.
There are more than 60 changes to Canada’s Banking Law, including things like shorter wait times to resolve complaints, electronic alerts that warn of low bank balances, and limits on how much you’re responsible for if your credit card is lost or stolen . .
The rule changes have been ten years in the making, and although the Canadian government adopted legislation to modernize the new rules in 2018, they only came into force three and a half years later, on June 30, 2022.
Some of the new changes to help benefit Canada’s 30 million banking customers include that the bank must address customer complaints within 56 days instead of 90 days.
Banks must limit liability for lost or stolen credit cards to $50 and warn customers if they overdraw or exceed their credit limit, which could incur additional fees.
After complaints that banks offered expensive and unnecessary products to their customers, they can now only sell products and services that are appropriate for their customers’ needs.
Conacher said banks had been selling products and services that would benefit their bottom line.
“The whistleblower reports revealed that banks were selling extra stuff, essentially selling consumers stuff they didn’t need to make more money and that’s going to be banned,” Conacher said.
CTV News Toronto reached out to Canada’s big banks and reached out to the Canadian Bankers Association.
A spokesperson for the association said in a statement: “Building and maintaining strong relationships with customers is of fundamental importance to banks in Canada. Banks spend a considerable amount of time, effort and resources to help ensure that customers receive products and services that are appropriate for them and that they have consented to receive.”
“Banks are committed to complying with consumer protection measures and have well-established codes of conduct that articulate standards of employee behavior, including expectations related to ethics, integrity and sales practices. The Canadian Bankers Association and its members have long supported a strong federal regulatory framework for consumers.”
While that’s good news for bank customers who may now only be liable for $50 if their credit card is lost or stolen, Conacher said banks can also say the customer was negligent in protecting their credit card information. and hold them accountable for any fraud that has occurred.
“The bank may say it’s your fault and then you’re just trying to go to court and do what you can to prevent them from taking money out of your account to pay the credit card charges that were made,” Conacher said.
Under the new rules, banks will also have to create a whistleblower program that will allow their employees to report issues that might otherwise go unreported.