Looking to increase consumer protections, federal officials in Canada have introduced new regulations on prepaid debit cards that limit fees and require card issuers to provide clearer information to customers. The rules, which apply to all banking institutions, are being enforced by the Financial Consumer Agency of Canada (FCAC).
“As the federal agency responsible for overseeing these regulations, we have updated our consumer information on prepaid cards and will continue to work with financial institutions to ensure that the requirements set out in the regulations are effectively implemented,” said Lucie Tedesco, commissioner of FCAC.
Specifically, the rules prohibit expiration dates on cards, ban maintenance charges for at least one year after the card is activated, and require disclosure of all card fees in an information box visible on a card’s packaging. Although the changes officially took effect earlier this month, the regulations will apply to all prepaid cards currently in the market, no matter when the cards were purchased.
Prepaid debit cards, which include promotional gift cards, let consumers make purchases or withdraw money from a pre-set amount. As in the U.S. – which mandated similar consumer protection rules in 2009 – banks, retailers and credit card companies all offer prepaid cards in Canada.
“As part of Canada’s Economic Action Plan, our government has committed to protecting consumers and saving Canadians money,” said Joe Oliver, Canada’s minister of finance. “These new regulations show we are taking action to support that commitment, helping to create jobs, growth, and prosperity across Canada.”