Canadian Credit Card Rule Changes Update


The search for the new credit card rules continues. I had put a call in the Finance Ministry today and they couldn’t put me in touch with anyone, so I was told to leave a message and someone will “call me back”. The wait begins today at 9:08am on February 26, 2010. Nonetheless, I found the rules that were published in the Canada Gazette on September 9, 2009.

Here is a summary of the credit card rule changes that came into effect on Jan 1, 2010 and below are the ones that will come in later in Sep 2010.

Over the limit fees due to holds

  • An institution may not charge a borrower an amount for surpassing their credit limit as a result of a hold on their credit card.

Consent for increases in credit limits

  • An institution may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent to do so.
  • If consent is given orally, they must later get confirmation in writing, paper or electronically, and simple use of the card doesn’t count

Debt collection

Debt collectors must inform debtors of the following when they’re in hot pursuit (and interestingly this was the longest section, must have been causing some problems):

    • the details of the debt, such as the amount owed and the type of debt; and
    • the identity of the person attempting to collect payment on behalf of the bank and the relationship with that bank
    • banks can’t communicate with the debtors, family, friends, teammates that can be considered “harassment” (very vague) and here are some examples:

– Swearing or coercive language
– Unreasonable pressure
– Making public or threatening to go public about the failure to pay (so no tweets about this)
– That the person guaranteed to pay
– That the person guaranteed to pay

    • The collection agency can contact the debtor’s employer only to confirm if they’re employed, title and work address, unless the debtor gives them written authority.
    • This part was brilliant, the debt collector’s can’t contact the debtor, their family , household, friends or neighbours:

– on Sundays (except 1-5pm local time) or holiday
– and only between 7am-9pm during the week
– Except….by cell phone

These must be very conscientious debt collectors…

Changes coming in on September 1, 2010.

Minimum grace period for new purchases

  • Account statements must be sent without delay after the last day of the billing cycle
  • The credit card company can’t ask for a minimum interest payments within 21 days after the last billing cycle
  • If the minimum payment due date is on Saturday or a holiday, it must be considered the next business day (so feel free to worry about it over the weekend…)
  • No interest can be charged on purchases of goods or services if the outstanding balance is paid in full. This doesn’t apply to cash advances it seems.

Allocation of payments

If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the institution must allocate any payment made by the borrower that is greater than the required minimum payment for that billing cycle among those amounts using one of the following methods:

  • by allocating that payment first to the amount with the highest interest rate and then allocating any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates;

I guess I won’t need the phone call after all, but let’s see how long it takes…

Related Topics

Credit Card News / Credit Cards

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