The new rules for the banking sector will take effect at the end of the month

Banks have already begun sending out notifications about some of the changes they will need to implement when the rules take effect on June 30, such as alerts when an account balance drops below 100. $ and new rules limiting liability to $ 50 for lost or stolen credit cards, except in cases of gross negligence.

The new rules also reduce to 56 the number of days after a complaint is first filed against a bank before someone can refer the issue to one of the third -party reviewers.

Previously, policies allowed a 90-day period following the bank’s second level of resolution, but the lack of transparency from banks about the timeline means that the actual average time before the issue is taken to higher the court lasted approximately 130 days.

Since the Finance Department sent out a preliminary consultation paper about the changes in late 2013, concerns about high-pressure selling tactics and upselling in the industry have also grown.

Today’s new rules specifically state that banks cannot “impose undue pressure” to sell a product or service, and that those products and services must be “appropriate to the person” and their financial needs.

A relationship that remains transactional

But while the new framework is forcing banks to improve their policies, it’s unclear how enforceable or effective the new rules will be.

” It doesn’t really change the core relationship between banks and their customers, which is always transactional. “

The guidelines don’t go so far as to establish a trustee’s duty to act in the client’s best interests as some security laws do, he says.

The changes also do not include financial product design rules used in Australia, the United Kingdom and the European Union, which require banks to design products for an appropriate target market and inquire in advance of developing a product if it is appropriate.

These policies are particularly useful for protecting consumers who are offered products and services through push notifications, without having the opportunity to inquire about the product and its suitability for achieving their goals. goal, Kimmett said.

Selling strategies were criticized

The Financial Consumer Agency of Canada (FCAC), which is charged with protecting the interests of bank customers, said the new rules should address many of the concerns about sales tactics it has raised. at the end of May in a report made in collaboration with mysterious buyers.

The document noted that approximately 15% to 20% of mysterious shoppers found product recommendations inappropriate, for example when offering premium credit cards that were not accompanied by questions about habits or income of consumers. In general, mystery shopping results are worse for the visible minority and Aboriginal customers.

For its part, the banking industry supports the changes brought about by the new framework, Canadian Bankers Association spokeswoman Mathieu Labrèche said in a statement.

” Banks spend a lot of time, effort and resources to ensure that customers receive products and services that are right for them and that they are willing to accept. Banks take to respecting consumer protection measures. “

Two competitors for complaint handling

Beyond the plot itself, critics like Ms. Kimmett that while complaint handling times have improved, the problem remains that Canada has two external bodies of complaints that banks can choose from. , which creates a kind of competition between the two organizations, which tries to keep banks as customers while making decisions against them.

The federal government has promised in the campaign to establish an external body of complaints and re-committed to it in the federal budget this year, but has not yet provided a timeline for its implementation. change.

The new rules also do nothing to protect consumers from unfair prices, observations Duff Conacher, co-founder of Democracy Watch, a Canadian advocacy organization.

” Policies are not very comprehensive in stopping abuse and discrimination, and nothing is done to stop [prix excessifs]. “

According to Mr. Conacher, in addition to better implementation ofFCAC itself, a more effective action by the federal government would be to follow the Liberal election promise to increase the power ofFCAC to check the prices charged by banks and impose changes if they are excessive.

This has been promised and it is a big promise, as this is the first time that a ruling party has promised to give a regulatory agency the power to review prices and impose changes.he said.

When asked about plans to create a single complaints board and adopt enhanced powers, a finance ministry official reiterated the budget commitment without giving further details, and said the government reviews it regularly. the framework of the financial sector and the protection of financial consumers.