Thursday, December 12, 2013
Canada starts prepaid card reform process
On Dec. 3, 2013, Canada's Department of Finance embarked on a regulatory development strategy designed to result in laws which ultimately protect prepaid cardholders. Via the Canada Gazette, the government of Prime Minister Stephen Harper said it intends to establish a financial consumer protection framework and promulgate subsequent regulations that will, among other things, provide rules for fee disclosures on prepaid cards, as well as ban expiration dates from the cards.
"The new Prepaid Payment Products Regulations will require that fees for prepaid payment products, which allow consumers to make purchases or cash withdrawals using funds that have been pre-loaded onto a card, be disclosed to consumers in an information box displayed prominently on the product's exterior packaging," the finance department said, adding that the disclosures be presented in a "clear, simple and not misleading" way.
The regulations will also eliminate expiration dates and impose a one-year delay (after prepaid cards are activated) on the charging of monthly maintenance fees. "With the launch of the Consumer Code consultations and new regulations for prepaid cards, Canadians will be better protected, informed and positioned to make responsible financial decisions for their families," said Kevin Sorenson, Minister of State (Finance) for Canada.
The finance department is giving Canadian citizens until February 2014 to comment on the proposal. The Financial Consumer Agency of Canada will be in charge of enforcing the new rules.
Editorial Note:
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