New banking rules just came into effect in Canada – These are the important changes

New rules came into affect late last month to create stronger consumer protections when it comes to Canada’s banking system, but some advocates said the new regulations don’t go far enough.

“These rule changes are baby steps to improving things a little bit,” said Duff Conacher, with Democracy Watch, a corporate responsibility advocacy group.

There are more than 60 changes to Canada’s Bank Act, which includes things like shorter wait times for resolving complaints, electronic alerts warning of low bank balances and limits in place as to how much you’re responsible for if your credit card is lost or stolen.

The rule changes have been ten years in the making and even though the government of Canada adopted legislation to modernize the new rules in 2018, they only took affect three and a half years later on June 30, 2022.

Some of the new changes to help benefit Canada’s 30 million banking customers include a bank must deal with customer complaints within 56 days instead of 90 days.

Banks must limit liability on lost or stolen credit cards to $50 and warn customers if they go into overdraft or over their credit limit, which could incur them added fees.

After complaints that banks were pitching expensive and unneeded products to their clients, they can now only sell products and services that are appropriate for their customers needs.

Conacher said banks had been selling products and services that would benefit their bottom line.

“Reports by whistle blowers revealed that banks were upselling, essentially selling consumers things they didn’t need in order to make more money and that is going to be prohibited,” said Conacher.

Voicesuit reached out to Canada’s big banks and was directed to the Canadian Bankers Association.

A spokesperson for the association said in a statement, “Building and maintaining strong customer relationships is of fundamental importance for banks in Canada. Banks devote considerable time, effort and resources to help ensure customers are provided products and services that are appropriate for them and which they have consented to receive.”

“Banks are committed to compliance with consumer protection measures and have well established codes of conduct that articulate standards of employee behaviour, including expectations related to ethics, integrity and sales practices. The Canadian Bankers Association and its members have long supported a strong federal regulatory framework for consumers.”

While it is good news for bank customers that they can now only be held liable for $50 if their credit card is lost or stolen, Conacher said banks can also say the client was negligent protecting their credit card information and find them responsible for any fraud that has occurred.

“The bank can say it’s your fault and then you are on your own trying to go to court and do what you can to stop them from taking money out of your account to pay for the credit card charges that were made,” said Conacher.

Under the new rules banks will also have to create a whistleblower program that will allow their employees to come forward to expose problems that would otherwise go unreported.