If you’ve been spending more than you can afford lately, don’t be surprised when you receive an alert from your bank.
Your bank is now required to tell you when you don’t have enough money in your account.
It’s one of the key protections provided in Canada’s new Financial Consumer Protection Framework, which kicked off on June 30.
Starting today, bank customers will benefit from new and enhanced protections.
— ItPaysToKnow (@FCACan) June 30, 2022
“The financial well-being of Canadians is hugely important and we’re taking more action to protect people in their dealings with banks,” said Deputy Prime Minister and Minister of Finance Chrystia Freeland in a statement.
“Canada’s new Financial Consumer Protection Framework includes more than 60 new or enhanced protections and it will help Canadians manage their money with more confidence and peace of mind.”
Customers will now receive electronic alerts to help them avoid going into overdraft or spending over their credit limit, which can result in fees.
Along with this are other protections that aim to hold banks to a higher standard and require them to put customers’ rights and interests first.
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Here’s the full list of new rules banks need to follow:
- Deal with customer complaints within 56 days. This is the first time that banks will be required by law to deal with complaints within a specific period.
- Ensure that the way they pay their employees does not interfere with the new obligation to offer and sell products and services that are appropriate for their customers.
- Provide advance notice so customers can decide if they want to renew or cancel their products or services.
- Provide separate agreements for each product and service so customers understand what they are buying, how much it will cost, and how to cancel an agreement.
- Comply with broader protections against providing misleading information or using coercive sales practices.
In order to hold banks accountable for any shady practices, the financial institutions will also need to create a whistleblowing program for their employees to encourage them to come forward if they notice problems.
Bank employees will also be able to report wrongdoings to the Financial Consumer Agency of Canada (FCAC) or the Office of the Superintendent of Financial Institutions (OSFI).