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Consumers Left Out in the Code

(OTTAWA)— Consumers will face higher transaction costs and lose consumer rights in debit and credit payment transactions if the Minister of Finance’s Draft Code of Conduct for the Credit and Debit Card Industry in Canada is implemented, says the Public Interest Advocacy Centre.

PIAC yesterday filed its comments on the draft Code, stating that: “Implementation of some of the Draft’s provisions would significantly increase consumer search and transaction costs and clash with consumer rights as legislatively implemented, without providing consumers any compensatory benefit. It would also be unlikely to provide effective remedies to the problems encountered by merchants, which are real.”

PIAC highlighted the draft Code’s provision allowing merchants to direct consumer payments to the merchant’s preferred network on so-called “co-badged” debit cards now entering the Canadian market. “Removing consumer control of payments is unacceptable and unnecessary” said John Lawford, counsel for PIAC, “Instead, consumers should be provided with the ability to choose easily which network they prefer.”

Merchant discounting and surcharging of various payment methods would also likely be unwieldy, more costly and lead to significant confusion among and burden upon consumers, said PIAC of another practice recommended in the draft Code.

“This Code is not the answer,” continued Lawford, “the real issue is the regulation of all electronic payments in Canada under clear and enforceable rules – which is what is lost in this debate.”

PIAC’s comments to the Minister of Finance A ghost in the machine? The consumer perspective on the draft code of conduct for the credit and debit card industry [pdf file: 0.3mb] are available for download.

For more information, please contact:
John Lawford
Counsel
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
Ottawa, ON K1N 7B7
(613) 562-4002×25 (Tel)
(613) 562- 0007 (Fax)
lawford@piac.ca

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