As part of its 2013 Budget tabled in Parliament yesterday, the
federal government has indicated its intention to develop a
"comprehensive financial consumer code to better protect
consumers of financial products and ensure they have the necessary
tools to make responsible financial
decisions."1 This pledge seems to be in
fulfillment of Parliament's intention expressed in the third
recital of the new preamble to the Bank Act that was
enacted in 2012: "And whereas it is desirable and is in the
national interest to provide for clear, comprehensive, exclusive,
national standards applicable to banking products and banking
services offered by banks;". It is also no doubt in response
to the decision of the Québec Court of Appeal in
Marcotte v. Banque de Montréal that was handed down
in August 2012. In that case, the court found that because the
regulatory regime under the Bank Act did not provide for
civil recourse for the failure to disclose a foreign exchange fee
– and did not exclude such recourse — then
provincial legislation that provided recourse in such circumstances
could apply. The new code will presumably do its utmost to plug
this hole — but will this mean that the code will
include remedies for consumers in certain cases of non-disclosure
or incorrect disclosure on top of the current penalties and
sanctions that may be levied and imposed by the Financial Consumer
Agency of Canada?
Given that, the Bank Act alone contains several dozen
"consumer provisions" and at least six sets of
regulations containing numerous provisions that set out disclosure
requirements and regulate certain practices, the consolidation of
all of these provisions into a comprehensive code will be a
time-consuming and difficult task. The government has indicated in
the Budget that it will be engaging in extensive consultations
before settling on the new code. This could be a very challenging
process for the banks.
On a related matter, the government has indicated in the
Budget2 that it will soon be finalizing and releasing
the Addendum to the Code of Conduct for the Credit and Debit
Card Industry in Canada for Mobile Payments that it released
last September. The Addendum is intended to update the current Code
so that it will also apply to payments made using the near field
communication technology on smart phones in the same way that it
currently applies to credit and debit cards.
Earlier this year the head of French fashion's governing body rejected the option being explored by the Council of Fashion Designers of America to allow fashion week runway shows to be converted into consumer events.
The offer of rewards points (either through credit card spending or other loyalty programs) has become so ubiquitous in consumer businesses that there are hardly any companies of any significant size...
Although perhaps not a surprising result in terms of constitutional law, in a proposed class action the B.C. Supreme Court has held that general purpose prepaid cards issued by federally-regulated financial institutions are subject to the provisions of the B.C. Business Practices and Consumer Protection Act.
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