Financial Crime World

New Protections for Canadian Bank Customers: What You Need to Know

Canadian banking customers now benefit from new and enhanced protections as part of the country’s new Financial Consumer Protection Framework, effective June 30, 2022.

Existing Protections

Canadian banks are required to uphold various consumer protections, safeguarding access to essential banking services, and fair treatment. Key protections include:

  • Opening personal accounts
  • Free cash of Government of Canada cheques
  • Clear and non-misleading information
  • Fair complaint handling

New Additions

The Framework introduces additional consumer protections:

More Comprehensive and Timely Information

Banks are required to:

  • Provide electronic alerts
  • Offer advance notice before product renewals
  • Present separate agreements for optional products and services

Higher Sales Practices Standards

Banks must:

  • Offer appropriate products and services based on customers’ financial needs
  • Obtain express consent before selling any product or service
  • Keep information true and not misleading
  • Refrain from applying undue pressure

Enhanced Complaints Handling

Banks are expected to:

  • Improve their complaints handling processes
  • Provide refunds and credits (redress)

Increased Cheque Deposit Limit

Canadians can now cash a Government of Canada cheque for a higher limit.

Whistleblower Program

Bank employees now have a way to report any misconduct or breaches of the Framework.

Modernizing the Bank Act

The Financial Consumer Protection Framework came about as part of the Canadian government’s efforts to modernize the Bank Act in 2018, giving the Financial Consumer Agency of Canada (FCAC) new powers to protect consumers. Notable changes include:

  • Imposing penalties up to $10 million per violation of legal obligations
  • Directing banks to take corrective actions
  • Imposing mandatory third-party, independent audits

Consultations and Reviews

Exhaustive consultations with stakeholders across Canada led to the new legislation and Financial Consumer Protection Framework. Reports on best practices in financial consumer protection, retail sales practices, bank complaint handling procedures, and the operations of external complaints bodies were taken into account.

Learning More

For more information on your banking rights and the new protections, visit the following resources: