New rules went into 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 small steps toward making things a little bit better,” said Duff Conacher of Democracy Watch, an advocacy group for corporate accountability.
There are more than 60 changes to Canada’s banking law that include things like shorter wait times for complaints to be resolved, electronic alerts warning of low bank balances and limits on how much you’re liable for if your credit card is lost or stolen.
The rule changes were 10 years in the making, and although the federal government passed legislation to modernize the new rules in 2018, they didn’t come into effect until three and a half years later, on June 30, 2022.
Some of the new changes to benefit Canada’s 30 million bank customers include that the bank must process 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 fall into an overdraft or exceed their credit limit, which could result in additional fees.
After complaints that banks were offering expensive and unnecessary products to their customers, they can now only sell products and services that are relevant to their customers’ needs.
Conacher said the banks were selling products and services that would benefit the bottom line.
“Whistleblower reports have revealed that banks are overselling, essentially selling consumers things they don’t need to make more money, and that will be outlawed,” Conacher said.
CTV News Toronto reached out to Canada’s major banks and was directed to the Canadian Bankers Association.
A spokesperson for the association said in a statement: “Building and maintaining strong customer relationships is fundamental to Canada’s banks. Banks spend considerable time, effort and resources to help customers get products and services that are right for them and that they have agreed to receive.
“Banks are committed to complying with consumer protection measures and have well-established codes of conduct that set out standards of employee behavior, including expectations related to ethics, integrity and commercial practices. The Canadian Bankers Association and its members have long supported a strong federal regulatory framework for consumers.
While it’s good news for bank customers that they can now be held responsible for as little as $50 if their credit card is lost or stolen, Conacher said banks can also say the customer was negligent in protecting their credit information card and hold them responsible for any fraud that occurred.
“The bank can say it’s your fault, and then you try to go to court yourself and do what you can to stop them from taking money out of your account to pay the credit card charges that are made,” Conacher said.
Under the new rules, banks will also have to set up a whistleblowing program that will allow their employees to come forward to uncover problems that might otherwise go unreported.
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