PIAC Calls for New Payments Framework and Regulator

New PIAC report, “Innovative Oversight: strengthening the Canadian payments system”

OTTAWA, August 24, 2015– In a new report released today, the Public Interest Advocacy Centre (PIAC) called for a payment system framework designed and implemented to oversee all retail payment-related activities, all types of payment instruments and all payments system providers in Canada. PIAC also recommended a dedicated body be established to monitor and regulate the Canadian payments ecosystem. The report, entitled “Innovative Oversight: strengthening the Canadian payments system,” was submitted to the federal Department of Finance as part of a consultation on the oversight of national payment systems.

“The Canadian payments ecosystem needs a comprehensive regulatory framework in order to enhance consumer trust and accessibility, as well as to promote competition and innovation in the payments market,” stated John Lawford, PIAC’s Executive Director and General Counsel. “It is possible to have an innovative payments market while ensuring that stakeholders are both well protected and actively involved in the process,” noted Lawford.

PIAC’s report outlined a series of risks currently facing the Canadian payments system, and analyzed the suitability of existing bodies to undertake payments regulation. The report concluded a regulator be established with a mandate over all payment functions, instruments and providers. As well, the report recommended an oversight framework that requires the regulator to collaborate on an ongoing basis with stakeholder communities.

“PIAC makes these recommendations in order to ensure a strong and efficient framework for the payments ecosystem that Canada sorely needs. Without significant enhancement, Canada’s payment ecosystem will remain in the slow lane, while regimes in other jurisdictions continue to pass us,” concluded Lawford.

To see the full report, please consult the following link:
Strengthening Canadian Payment System PIAC Submission
You may also see PIAC’s commentary, entitled The Oversight of Prominent Payment Systems: Are we Keeping Time? This submission was PIAC’s response to a Bank of Canada consultation paper and request for comment:
OversightProminentFinal.
 
For more information please contact:
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×25
lawford@piac.ca
www.piac.ca
 

Consumers unlikely to save money under Visa and MasterCard’s voluntary proposals

FOR IMMEDIATE RELEASE – OTTAWA – The Public Interest Advocacy Centre (PIAC) questions the logic employed by the Minister of Finance that the two voluntary credit card proposals he accepted yesterday, “should ultimately result in lower prices for consumers.”
“While Visa and MasterCard did bring forward these proposals, the notion consumers will save significant money as a result of these agreements is questionable, given the lack of any mechanism compelling merchants or acquirers to pass on the proposed savings,” noted John Lawford, Executive Director and General Counsel of PIAC.
MasterCard has publicly stated, “All 700,000+ active MasterCard accepting merchants should benefit from such interchange reductions, dependent on acquirers implementing the changes and passing along these reductions.”
“Thus, in order for consumers to benefit from these proposals, the acquirers have to pass on savings to the merchants, and in turn the merchants have to pass on savings to the consumer- it’s a house of credit cards,” noted Lawford. Moreover the agreements themselves are voluntary, with each partner retaining the right to end the agreement without notice or penalty.
“We encourage the Minister of Finance to continue working towards permanent solutions to issues related to credit card interchange fees,” noted Jonathan Bishop, Research Analyst for PIAC. “We also encourage the annual verification of credit card interchange rates referred to by the Minister of Finance to be made publicly available, in the spirit of transparency, said Bishop.
For more information please contact:
John Lawford
Executive Director/General Counsel
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
Ottawa, Ontario
K1N 7B7
(613) 562-4002×25
(613) 447-8125 (cell)
jlawford@piac.ca
or
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca

Fighting for consumer rights


 

New PIAC report, “Deal of the Day?: Consumer Protection in Online Group Buying Deals”

OTTAWA, March 19, 2014 – Canadian online deal site consumers expect a comprehensive refund policy, easily understood conditions and a complaint resolution process to assist them if they encounter redemption issues, according to a report released today by the Public Interest Advocacy Centre (PIAC) entitled, “Deal of the Day?: Consumer Protection in Online Group Buying Deals.”
The report recommended Canadian deal site industry leaders collaborate to create an industry body to address issues of commonality when required. Consumers and deal site operators would benefit from the creation of universal industry standards regarding:
• the redemption of deal site vouchers for their face value once they have expired;
• the period of validity for deal site offers. PIAC suggests this period be for one year after date of purchase; and,
• the refund of a deal site offer.
“Confidence in the Canadian deal site industry would be enhanced if consumers were assured of a hassle-free refund, face-value redemption if their deal expires and a year to redeem their deal site offers,” contended Jonathan Bishop, PIAC’s Research Analyst and author of the report. While deal site providers have responded to consumer concerns in recent years, Canadians continue to place a limited amount of trust in online deals. “Canadian consumers are once-bitten, twice-shy when it comes to deal site offers. They rarely spend more than $40 on a deal site offer, due to previous redemption experiences,” noted John Lawford, PIAC’s Executive Director and General Counsel.
The report recommended that Canadian deal sites consider collecting and displaying cumulative consumer feedback ratings for the retailer and deal site involved in each deal site offer. “Consumers, retailers and deal site providers would each benefit from an innovative customer feedback model,” claimed Bishop. The report also called for Canadian deal site providers to continue undertaking due diligence when negotiating a deal site offer with a retailer, limiting the number of deal vouchers offered under any deal, as well as the number of deal offers issued by a single retailer, when necessary.
To see the full report, please consult the following link:

thumb_pdfDownload File: deal_of_the_day.pdf [size: 0.59 mb]

To view the report in French, please consult the following link:

thumb_pdfDownload File: deal_of_the_day_fr.pdf [size: 0.68 mb]

 
PIAC received funding from Industry Canada’s Contributions Program for Non-Profit Consumer and Voluntary Organizations to prepare the report. The views expressed in the report are not necessarily those of Industry Canada or the Government of Canada.
For more information please contact:
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca
www.piac.ca
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×25
Mobile (613)447-8125
lawford@piac.ca
www.piac.ca

PIAC Submission to Canada’s Financial Consumer Protection Framework: Consultation Paper

PIAC is pleased to provide public access to its submission to the Department of Finance on: Canada’s Financial Consumer Protection Framework: Consultation Paper. We encourage all other parties who filed such submissions and the Department of Finance to publicly post their submissions in the interests of transparency and cooperation towards development of a comprehensive financial consumer code.
 

thumb_pdfPIAC Submission to Canada’s Financial Consumer Protection Framework: Consultation Paper
Download File: piac_financial_code_28_feb_2014_final_for_finance_smaller.pdf [size: 0.62 mb]

TODAY is the LAST DAY to tell the government what you think about banking!!!

TODAY is the last day (until Friday, 28 February 2014 at 5 p.m. eastern time) to tell the federal government what you think about banking in Canada. You will be commenting on the federal government’s document Canada’s Financial Consumer Protection Framework: Consultation Paper , released 3 December 2013.
This consultation asks whether Canada should adopt a financial consumer code that banks and other federal financial institutions will have to follow in serving their customers. It’s an important opportunity for Canadian consumers to improve consumer protection in financial services in Canada. To assist, PIAC has prepared a short description of some banking codes in other countries (below) that may assist you in preparing your comment to the government. Please take the time to make a comment by 28 February 2014 to improve banking for consumers in Canada!
Deciphering Codes: Banking codes and Consumer Rights
In many countries, there are consumer codes that protect people while banking. These can vary, but most at least have guidelines for the financial institutions to follow. Canada is actually somewhat unique in that it has no real rulebook for consumer guidelines. Instead, some ad hoc consumer protection rules have been added to the Bank Act, Canada’s original governing document for banking.
The act’s original purpose when it was introduced in 1871 was to make sure that the banks don’t fail; for example, it dictates the money they’re required to have available and what kind of business the bank can engage in. Later, when consumers began running into problems, the act had consumer rights inserted. There are consumer protections in the act, but many countries have already gone the extra mile for the people who use banking daily.
While Canada has a few hard-line rules in place, other countries over the last 10-15 years have created comprehensive banking codes of conduct which serve the consumers and ensure their best interest is looked after. They have put rules in place that are specifically there to protect consumers, and especially protect seniors and other vulnerable populations.
Despite the common goal of protecting consumers in banking, several countries around the world have taken different approaches to the question of how to structure their banking code.
For instance, the Netherlands has a “Banking Code” designed to be flexible to fit into the larger European banking regulatory regime. The Dutch code works under the principle of ‘comply or explain’ meaning while the code is broadly applied, banks can satisfy the code with an alternative solution and a reasonable explanation for not sticking to the code. The Dutch code also requires that banks create an executive board within the bank to ensure that they always treat their clients with due care and that that message is embedded in the bank’s culture. Dutch banks are subject to audits to ensure these customer policies are in place and are appropriate.
In Australia, the “Code of Banking Practice” is more prescriptive and places more requirements on the bank to look out for its customers in several typical transactions and situations. For example, if a consumer were to guarantee the debt of another debtor, the bank must take several steps to ensure the guarantee is freely entered into, that the person guaranteeing the credit knows about his or her potential liability to repay the debt and must ensure that the person guaranteeing the debt acts independently and free from pressure from the primary debtor. This emphasis on prescriptive rules seeks to ensure that consumers won’t fall prey to well-known problems with banking.
Ireland has the “Consumer Protection Code 2012” ) which is a somewhat of a blend of the Dutch and Australian models. There are general principles for financial institutions based largely on the requirement to act “in the best interests of its customers.” The Central Bank of Ireland then oversees these general principles and ensures the financial institutions are in compliance with the spirit and substance of the code through research, themed inspections, advertising monitoring, and mystery shopping. If an institution is found in violation, they’re subject to sanctions. The Irish code also specifically defines and protects “vulnerable consumers”, who must be accorded special care by banks.
We now have an opportunity for Canada to build a strong, consumer-friendly financial code ourselves, with the consumers giving input. The models mentioned above are worth considering and perhaps borrowing from in our own code.
If you have a bank account or opinions on banking, you have a great opportunity to have your voice heard through the Department of Finance’s Canada’s Financial Consumer Protection Framework: Consultation Paper. Your comments must be sent to the government by February 28, 2014, so do not delay sharing your thoughts. This consultation will be shaping what will be our own consumer code for Canadian banking, and it needs Canadian voices to guide it. We can change the way Canada does banking for the better with your help!
A summary of this consultation and why it’s important to you is available at Tell the government what you think of banking.

Financial – Links

Note: PIAC is in no way responsible for the content of the websites or activities of the listed organizations.

Bank Fees:

Make sure you’re not paying too much with Financial Consumer Agency of Canada’s interactive Cost of Banking Guide

Credit Card Rates:

Select the best credit card for you and answer your questions about credit cards with Financial Consumer Agency of Canada’s Interactive Credit Card Tool

Credit Reporting

The three major credit reporting agencies:

 

Tell the government what you think about banking!

WHAT DO YOU THINK OF BANKING IN CANADA?

This is the Public Interest Advocacy Centre’s explanation of the federal government’s document Canada’s Financial Consumer Protection Framework: Consultation Paper , released 3 December 2013.
You have until 28 February 2013 to reply. We really want you to. Please read on to see how!
What’s Happening?
The Canadian federal government (the Department of Finance, to be exact) is asking what you think about banking, what problems you may have had with banks, and what you would like them to do about it. They are thinking of creating a “Financial Consumer Code” to tell the banks what rules consumers think they should follow to be a responsible bank in Canada.
First, please read the government’s own consultation paper Canada’s Financial Consumer Protection Framework: Consultation Paper . This is the official consultation document and has the exact wording.
This document explains more briefly what the government is asking because we at the Public Interest Advocacy Centre want all Canadians to tell the government what they think banking rules should be, so that they get the best banking services possible. However, please read the government consultation paper for the full set of questions asked.
Why Should You Care?
Because it’s your money. Banking is, at its simplest, you loaning your money to the bank for safekeeping until you need it back. These are your deposits and most Canadians have a bank account for just that purpose. From there we add the convenience of chequing so we can pay for things without the need for cash. Banks issue credit cards from major credit card systems so we can make even more payments. Many Canadians also have a major loan from the bank: their mortgage. Finally, many Canadians use electronic banking to make their bill payments and other banking affairs quicker and easier to manage.
We’ve all dealt with these aspects of banking, likely on a daily basis. This is an opportunity to make a real change in the banking industry. The Government wants to hear your thoughts on the system. If you’ve encountered problems while banking, you can tell your story and not only will you be heard, but you could make a huge difference in banking going forward.
So What Does the Consultation Ask?
The consultation document is asking how the federal government can make the banks follow rules to protect consumers (their bank account holders, credit card users and payments makers) while they make money from banking services.
There are some specific questions the government is asking which you can answer with your stories about banking. In particular, the government is asking about:
ADDRESSING THE NEEDS OF SENIORS AND VULNERABLE CANADIANS
Banking can be challenging to understand for anyone. This consultation is particularly interested in information from and about seniors or people with vulnerabilities such as Canadians who have trouble reading. The government is concerned that they may be susceptible to issues such as financial fraud, mis-selling and poor financial outcomes.
RESPONSIBILITY OF FINANCIAL INSTITUTIONS TO CONSUMERS
What is your bank’s responsibility to you? Currently, Canada does not have a default standard for how financial institutions should treat consumers or a uniform level of responsibility that they owe to consumers. Instead, the standards are specific to the product or service being provided, which may vary.
The consultation is looking for ideas or opinions on what you believe the bank should be responsible to you for, and what that level of responsibility should be.
ACCOUNTABILITY AND ENFORCEMENT
If a dispute were to come up in your banking, what can you do about it? The Financial Consumer Agency of Canada (FCAC) oversees some consumer aspects of banking, and this consultation wants to know what tools and powers the FCAC might need to effectively watch over the banks, should it be tasked with doing so.
DISCLOSURE ABOUT FINANCIAL PRODUCTS AND SERVICES
The consultation asks if fully informed consumers will make better financial decisions that will lead to more responsible banking. Right now, the banks are required to be upfront about certain aspects of their services. This consultation wants to know the key information you believe consumers need in order to make informed decisions. They also want to know if you think there are cases where just providing the information isn’t enough and whether there should be other consumer protection in place in addition to information about a financial product or service.
ACCESS TO FINANCIAL SERVICES
Affordable access to banking for all Canadians is a major goal of this consultation; we want to ensure it becomes a reality. Have you ever encountered trouble in accessing services from your bank? Do you have thoughts on how those situations could be addressed?
A Final Note about Privacy
This is a public consultation, so your identity, or anything you write that identifies you or others you know will be made public, unless you ask the government in your email or letter to try to keep your identity confidential. Please consider this before you send your comments.
Comments are due by February 28, 2014. You can send comments electronically to: code.consult@fin.gc.ca Written comments should be sent to:

Jane Pearse
Director, Financial Institutions Division
Financial Sector Policy Branch
Department of Finance Canada
L’Esplanade Laurier
15th Floor, East Tower
140 O’Connor Street
Ottawa, ON K1A 0G5
Facsimile: 613-943-1334

If you have further questions about the consultation, please e-mail piac@piac.ca and we will assist you as best we can. Please comment on banking in Canada!

Canadians have important opportunity to weigh in on a financial consumer code

OTTAWA – Today the federal Government announced broad public consultations as a first step towards a Consumer Code for financial consumers. The Public Interest Advocacy Centre (PIAC) is very pleased to see this government follow through on its Budget 2013 commitment to create a Financial Consumer Code, and we urge all Canadians to comment during the consultation. PIAC is also encouraged to see the Government taking steps to deal with unreasonable prepaid card fees and practices that eat away at Canadians’ hard-earned money.
Canadians have until February 28, 2014 to submit their input into the consumer code. The feedback from the consultation will then be used as the basis for roundtable discussions across Canada in 2014.
The Government is seeking input on a wide range of issues that will affect Canadians’ everyday finances – from reasonable access to basic banking services, to a basic standard of responsibility for financial institutions, to enforcement of basic rights and dispute resolution.
PIAC invites Canadians to contact us for more information about and assistance with the Code consultations through our website at www.piac.ca
“Canadians have a direct interest in this very important consultation”, emphasized John Lawford, PIAC’s Executive Director and General Counsel. “This is an opportunity to contribute to a baseline set of rules and responsibilities that govern financial institutions in their dealings with consumers. The outcome will affect banking and payments rights – your wallet.”
“Without direct input from many Canadians, there is a risk that consumers’ voices will be drowned out by a well-organized lobby that cares about a different bottom line than yours”, added Geoff White, Counsel to PIAC.
For more information on the Consultation, please visit: Canada’s Financial Consumer Protection Framework: Consultation Paper(Canada’s Financial Consumer Protection Framework: Consultation Paper)
John Lawford
General Counsel and Executive Director
Public Interest Advocacy Centre
(613) 562-4002×25
(613) 447-8125 (cell)
jlawford@piac.ca
Geoff White
Counsel
Public Interest Advocacy Centre
(613) 562-4002×24
gwhite@piac.ca

Consumer Group Calls for Increased Scrutiny of Loyalty Programs

OTTAWA, November 13, 2013 – Consumers need more protection in their loyalty programs, according to a report released today by the Public Interest Advocacy Centre (PIAC) entitled, “Customer Loyalty Programs: Are Rules Needed?” The report based calls for a rebalancing of the scales between consumers and loyalty providers.
The report looked at the popularity of loyalty program branded credit cards and found a loyalty program is the primary factor that makes a card a consumer’s preferred choice. Such programs are a significant revenue generator for Canada’s banking institutions. In return for using their loyalty brand credit card, Canadian consumers typically receive about 2% of their spending, back in terms of rewards, unless they use a credit card with an annual fee. As a result, Canadians usually have to spend over $1000 to obtain a $20 reward. The study recommends an evaluation be done to assess loyalty programs and credit cards.
“PIAC is calling on policy makers to define ‘loyalty currency’ as a form of non-cash payment, with the intention of having loyalty currency enjoy protections similar to other forms of payment under the payments system in Canada” added John Lawford, Executive Director of PIAC. The report noted that consumers have little recourse when loyalty program providers unilaterally decide to devalue their loyalty currency, or change other terms and conditions of loyalty programs. In its recommendations the report concluded industry-wide guidelines be introduced relating to loyalty currency devaluation to provide greater certainty for consumers.
“The collection of consumers’ purchasing data is the prize for customer loyalty program providers,” noted Jonathan Bishop, PIAC Research Analyst, “the data is the main reason behind loyalty brand marketing which aims to both keep customers and have them spend on other products and services”.
Other recommendations in the report include the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs, industry-wide guidelines introduced regarding the notice given to change loyalty program terms and conditions, loyalty program withdrawal, as well as for practices relating to the transfer and bequeathing of loyalty program currency.
Download the report at Customer Loyalty Programs: Are Rules Needed?
Download French edition of the report at Programmes de fidélisation de la clientèle ― des règles sont-elles nécessaires?
The appendices to the report are at this link.
PIAC received funding from Industry Canada’s Contributions Program for Non-Profit Consumer and Voluntary Organizations to prepare the report. The views expressed in the report are not necessarily those of Industry Canada or the Government of Canada.
For more information please contact:
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca
www.piac.ca
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre
(613) 562-4002×25
Mobile (613) 447-8125
lawford@piac.ca
www.piac.ca

Consumers Group Calls for Increased Accountability from Financial Planners

OTTAWA – Canadian consumers need increased protection when dealing with the financial planning industry, according to a report released today by the Public Interest Advocacy Centre (PIAC) entitled, “Purse Strings Attached: Towards a Financial Planning Regulatory Framework.” The report, which follows a 2009 investigation of the same industry, reveals that progress has been made in recognizing the need for reform. However, the pace of this process has been slow for an industry entrusted with the financial security of Canadian consumers.
“It’s time all employees of the financial planning industry in Canada face the reality-they need to employ a uniform standard of care for investors, complete with a full disclosure of how they’re being compensated,” noted Jonathan Bishop, Research Analyst at PIAC and co-author of the report. The report found that other jurisdictions, such as the United States and Australia, have recently addressed difficult issues in their financial planning industries, such as the disclosure of compensation structure and a duty to clients. Canada meanwhile, has yet to resolve these financial planning reform issues.
The report concluded the time remains ripe for provincial consumer and finance ministries to work towards a regulatory framework for financial advisors and, if constructive, a regulatory regime for financial planners in each province. “PIAC continues to believe a financial advisor legal framework similar to what exists in Québec is clearly the most beneficial to consumers and should be adopted with local modifications by all provinces,” contends John Lawford, Executive Director and General Counsel for PIAC.
Other recommendations include the introduction of a personal tax credit for using a fee-based financial planner, in order to motivate clients to switch to this method. “Our research reveals Canadian consumers are potentially leaving thousands of their retirement dollars in someone else’s hands by not being fully informed of how their financial planner is being compensated. As Canadians become increasingly concerned about their ability to finance retirement, this issue is just too important to ignore,” notes Bishop.
PIAC received funding from Industry Canada’s Contributions Program for Non-Profit Consumer and Voluntary Organizations to prepare the report. The views expressed in the report are not necessarily those of Industry Canada or the Government of Canada.
Download the new Public Interest Advocacy Centre report “Purse Strings Attached: Towards a Financial Planning Regulatory Framework”:

thumb_pdfPurse Strings Attached
Download File: pursestrings_attached_final_for_oca.pdf [size: 1.54 mb]

 
Le nouveau rapport par le Centre pour la défense de l’intérêt public (CDIP) intitulé « SERRER LES CORDONS DE LA BOURSE : VERS UN CADRE DE RÉGLEMENTATION DE LA PLANIFICATION FINANCIÈRE » peut être téléchargé ici:

thumb_pdfSERRER LES CORDONS DE LA BOURSE
Download File: pursestrings_attached_final_for_oca_fr.pdf [size: 0.63 mb]

 
For more information please contact:
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca
www.piac.ca
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×25
lawford@piac.ca
www.piac.ca