Ottawa: Finance Minister Joe Oliver today welcomed the coming into force of the Government’s Prepaid Payment Products Regulations on May 1. Prepaid cards, which are available through financial institutions and at retail commercial outlets, are used to make purchases or withdraw funds via a payment network such as American Express, MasterCard or Visa. Part of Canada’s Economic Action Plan, these regulations support our Government’s commitment to protect consumers and save money for Canadian families.
The new rules will ban maintenance fees for at least one year after the card is activated and will ensure that funds for a prepaid card never expire. Federally regulated financial institutions must also disclose fees in an information box that appears prominently on the card’s packaging.
The regulations also require that key information for consumers be included prior to issuing these cards in a manner that is clear, simple and not misleading. The new regulations apply to all federally regulated financial institutions, such as banks. The Financial Consumer Agency of Canada (FCAC) is responsible for overseeing and enforcing compliance with these regulations. FCAC has worked with federally regulated financial institutions that offer prepaid cards to ensure that the new requirements are fully implemented. Financial institutions have all indicated that the regulations will apply to all prepaid cards in the market on May 1, 2014, regardless of when the card was purchased.