Financial Consumer Agency of Canada

Financial Consumer Agency of Canada

July 10, 2007 15:24 ET

FCAC Survey: Many Canadians are not Well Informed About Financial Products and Services, or About their Rights in the Marketplace

OTTAWA, ONTARIO--(Marketwire - July 10, 2007) - The Financial Consumer Agency of Canada (FCAC) today released the results of a survey that highlights the difficulties that many Canadians experience in understanding financial products and services and their rights in the marketplace.

The survey results indicate that the majority of Canadian consumers feel that they are well informed about financial products and services. However it also reveals important areas where consumers need to improve their financial knowledge; for example with regard to their liability and the fees charged for financial products, and their rights when dealing with financial institutions.

"The survey shows that many Canadians don't feel they have the knowledge they need to make sound financial decisions," said FCAC's Acting Commissioner Jim Callon. "In the five years since our Agency was created, we have been developing the tools Canadians need to improve their financial literacy, and enable them to shop around and save money. I invite Canadians to make use of the many publications, on-line tools and other information products that FCAC has created to help them find their way in the financial marketplace."

The national survey is part of FCAC's continuing efforts to monitor the knowledge and attitudes of Canadian financial consumers. The survey looked at the following issues: how easily Canadians can conduct their personal everyday banking activities; their level of knowledge with respect to the financial products and services they use and their rights in this regard; their need for more information; and their attitudes towards financial institutions.

Many of the survey's findings support the view of the majority of respondents that consumers are well-informed regarding financial products and services. Other findings, however, reveal areas for concern about Canadians' financial knowledge.

Some of the survey's findings are as follows:



Consumer confidence / Awareness

- Most Canadians (87%) feel informed when they shop for financial products
and services. However a clear majority of respondents (60%) admitted that
they found most information about financial matters hard to understand.

- About one-third of Canadians are unclear about their rights in the
financial marketplace.

- Many Canadians (41%) acknowledge that they need more information.

Other findings:

Credit report and credit score

- Seventy-nine percent of respondents did not know how to dispute an entry
in their credit report.

- Fifty percent did not know the factors that contribute to an
individual's credit rating.

- Only 24 percent of Canadians know what their credit rating is and only
15 percent have requested a copy of their credit report.

Bank accounts / Debit cards

- Ninety-six percent of Canadians have a bank account, and 60 percent deal
with only one financial institution.

- Ninety-four percent of Canadians have a debit card, and 36 percent have
more than one.

- Most respondents read the information they receive from their bank and
pay attention to the fees they pay for services. However, only 76
percent of consumers who have a bank account review their bank
statements at least once a month.

- Twenty-eight percent of bank account holders did not know that both of
the individuals holding a joint account are fully responsible for the
account.

- Almost half of the consumers who tried to open a new bank account with a
new financial institution during the past year did not shop around.

Credit cards

- Thirty-seven percent did not know, or were mistaken about their
liability as primary or secondary credit card holders.

- Eighty-five percent have a credit card, and 58 percent have more than
one card.

- Thirty-one percent did not know what the annual interest rate was on the
credit card they used the most.

- Only 13 percent knew that the maximum amount of money they would have to
pay if someone used their lost or stolen credit card was $50.

- Of those who got a new credit card last year, only 36 percent compared
the new card with others they could get from different financial
institutions.


In the 2007-08 federal budget, the Government of Canada announced that it was investing $3 million, over two years, for FCAC to develop instructional materials for financial literacy education - especially for young people - and to facilitate the sharing of these materials and information with other financial education providers.

Consumers can save time and money when shopping around for financial products and services by consulting FCAC's publications or interactive tools, which are available on FCAC's Web site at www.fcac.gc.ca or in print, free of charge, by calling the Agency's Consumers Contact Centre at 1-866-461-3222.

Consumers can also view or download a copy of the survey report on-line on FCAC's Web site.

FCAC is an agency of the federal government that ensures compliance with the consumer protection laws and monitors compliance with the codes of conduct and public commitments that apply to banks and federally incorporated trust, loan and insurance companies. FCAC also provides consumers with accurate, objective information about financial products and services, and informs Canadians of their rights and responsibilities when dealing with federally regulated financial institutions.

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