Financial Consumer Agency of Canada

Financial Consumer Agency of Canada

August 01, 2012 11:49 ET

New Regulations Give Consumers More Control-and Quicker Access to Their Money

Consumers can now get cash from their cheques faster; financial institutions must get their consent for optional products and services

OTTAWA, ONTARIO--(Marketwire - Aug. 1, 2012) - Regulations that come into force today mean that people who deposit a cheque in person with a federally regulated financial institution can get the first $100 in cash right away. If the cheque is $100 or less, the financial institution must provide the full amount to consumers. If the cheque is deposited in an automated bank machine, these funds will be made available the next business day. The maximum hold time for the remainder of the cheque funds will be reduced.

Another regulation requires federally regulated financial institutions to obtain consent before charging their customers for a new optional product or service, such as optional insurance coverage on a loan or credit card, or overdraft protection.
The new rules are set out in the Access to Funds Regulations, as well as in the Negative Option Billing Regulations developed by the Department of Finance.

The Financial Consumer Agency of Canada (FCAC) will monitor compliance with these regulations, and its website has been updated to provide information to consumers about the changes to cheque hold periods and their rights and responsibilities regarding negative option billing.

"Consumers now have more options open to them when they deposit cheques, and they will be able to access their money sooner," says FCAC Commissioner Ursula Menke. "They will also have more control regarding their purchase of financial products and services like insurance for credit card balances or loans."

Changes to cheque hold periods

A cheque for $1,500 or less can now be put on hold for a maximum of four business days if the cheque is deposited by a consumer or eligible enterprise at a branch, and five business days if it is deposited in an automated banking machine. If the cheque is more than $1,500, the maximum hold is seven or eight business days, based on how it was deposited (at a branch or in a machine).

Exceptions

Immediate access to the first $100 only applies to cheques deposited by individual consumers.

The maximum cheque hold periods and access to the first $100 may not apply to cheques issued outside of Canada, those that are not in Canadian dollars or those deposited in accounts that have been open less than 90 days. If the financial institution refuses to provide you with the funds, it must explain this in a letter.

More details, including other exceptions, are outlined in Cheque Hold Periods and Access to Funds: Your Rights and Responsibilities.

Negative option billing: Your rights and responsibilities

Federally regulated financial institutions must obtain your consent before charging you for a new optional product or service, such as optional insurance coverage on a loan or credit card, or overdraft protection.

The financial institution cannot assume your consent simply because you have used the new optional product or service, and it must provide you with certain information both before and after you provide your consent. All communications seeking your consent must be clear, simple and not misleading.

More information about your rights and responsibilities with negative option billing is available online at itpaystoknow.gc.ca.

About FCAC

With educational materials and interactive tools, the Financial Consumer Agency of Canada (FCAC) provides objective information about financial products and services to help Canadians increase their financial knowledge and confidence in managing their personal finances. FCAC informs consumers about their rights and responsibilities when dealing with banks and federally regulated trust, loan and insurance companies. FCAC also makes sure that federally regulated financial institutions, payment card network operators and external complaints bodies comply with legislation and industry commitments intended to protect consumers.

You can reach us through FCAC's Consumer Services Centre by calling toll-free 1-866-461-3222 (TTY: 613-947-7771 or 1-866-914-6097) or by visiting our website: itpaystoknow.gc.ca.

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