Federal government enhances consumer protection legislation

The federal government has announced two new measures which will provide additional flexibility and/or protection to consumers of financial services.

The first such measure will reduce the maximum cheque hold period for consumers and small- and medium-sized enterprises. The maximum hold period is currently seven business days for all cheque amounts. This would be reduced to four business days for cheques of $1,500 or less. Following the changes, consumers will also have immediate access to the first $100 deposited by cheque.

Secondly, new rules will require federally regulated financial institutions (which would include the major banks) to obtain consumers’ express consent before providing a new optional product or service. The financial institution would be required to provide consumers with a summary of key information, including related fees and costs, before obtaining the consumer’s consent to receiving the new service.

More detailed information on the changes are outlined in the announcement and backgrounder, both of which are available on the Finance Canada Web site at http://www.fin.gc.ca/n11/11-022-eng.asp.

 

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