Cannan: Consumer protection enhanced

I had a constituent contact our office recently because of an incident with her credit card.

I had a constituent contact our office recently because of an incident with her credit card.

A department store transaction had resulted in an interest charge that seemed entirely unfair to her.

Interest charges on department credit cards are usually the highest at 29.9 per cent and, as with any credit card, the failure to pay your credit card debt within the 30 days allowed certainly can end up costing you.

It’s the reason it is so important to understand the terms and conditions in place when we sign on to receive a credit card.

To be fair though, all the fine print and terms and conditions associated with financial products can be confusing.

For that reason, the federal government has been busy working to make the everyday financial products you use fairer and more transparent.

Canadians deserve clear and direct information so they can make the best financial decisions in their best interests—and that’s happening more and more with pro-consumer measures.

Under new rules, all credit card applications and agreements must have all significant information, like interest rates, grace periods and fees, clearly and noticeably stated in plain language; no more text so small you need a magnifying glass to read it and more plain language so you don’t need a legal dictionary to understand it.

As well, monthly credit cards statements must now include a clear indication of how long it would take someone to pay off a balance when only making the minimum payments, at current interest rates.

Advance notice must now be provided on monthly credit cards statements if interest rates are going to increase during the next statement period.

But beyond these new rules for credit cards there is more.

Starting in August, we’re shortening the cheque hold period to give immediate access to the first $100 of a cheque cashed at a federal financial institution to give Canadians timely access to their own money.

We’ve also brought in a new code of conduct to ensure more transparent information for home-buyers on the often confusing issue of mortgage prepayments.

This is especially important because with clearer information, Canadians can better manage what is often the biggest investment of their lifetime—their home.

The code of conduct will require mortgage lenders to provide straightforward details on what rights home-buyers have and what obligations they face (including potential penalties) when paying down their mortgages.

Additionally, the code also requires this information also be provided at renewal and in annual statements.

And, finally, we are banning unsolicited credit card cheques that you’ll often see in your mailbox.

These ‘cheques,’ if used, are considered cash advances, which generally means higher interest rates and fees, and, like cash advances, interest begins to accrue immediately.

By banning unsolicited credit card cheques, consumers will now only receive them if and when they request them, and when they have made a fully informed decision to do so.

The bottom line?  Be informed before you sign on the dotted line.

If you would like more information on these and other pro-consumer measures introduced by our government please visit