Prepaid Payment Products Regulations
SOR/2013-209
COOPERATIVE CREDIT ASSOCIATIONS ACT
Registration 2013-11-25
Prepaid Payment Products Regulations
P.C. 2013-1280 2013-11-25
His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 454Footnote a, 458.3Footnote b, 459.4Footnote c, 572Footnote d, 575.1Footnote e, 576.2Footnote f and 978Footnote g of the Bank ActFootnote h, sections 385.21Footnote i, 385.252Footnote j, 385.28Footnote k and 463Footnote l of the Cooperative Credit Associations ActFootnote m, sections 485Footnote n, 488.1Footnote o, 489.2Footnote p, 603Footnote q, 606.1Footnote r, 607.1Footnote s and 1021Footnote t of the Insurance Companies ActFootnote u and sections 440Footnote v, 443.2Footnote w, 444.3Footnote x and 531Footnote y of the Trust and Loan Companies ActFootnote z, makes the annexed Prepaid Payment Products Regulations.
Return to footnote aS.C. 2012, c. 5, s. 44
Return to footnote bS.C. 2012, c. 5, s. 47
Return to footnote cS.C. 2012, c. 5, s. 51
Return to footnote dS.C. 2012, c. 5, s. 68
Return to footnote eS.C. 2012, c. 5, s. 70
Return to footnote fS.C. 2012, c. 5, s. 72
Return to footnote gS.C. 2010, c. 12, s. 2092
Return to footnote hS.C. 1991, c. 46
Return to footnote iS.C. 2012, c. 5, s. 113
Return to footnote jS.C. 2012, c. 5, s. 115
Return to footnote kS.C. 2012, c. 5, s. 117
Return to footnote lS.C. 2005, c. 54, s. 208
Return to footnote mS.C. 1991, c. 48
Return to footnote nS.C. 2012, c. 5, s. 135
Return to footnote oS.C. 2012, c. 5, s. 137
Return to footnote pS.C. 2012, c. 5, s. 139
Return to footnote qS.C. 2012, c. 5, s. 149
Return to footnote rS.C. 2012, c. 5, s. 151
Return to footnote sS.C. 2012, c. 5, s. 152
Return to footnote tS.C. 2005, c. 54, s. 364
Return to footnote uS.C. 1991, c. 47
Return to footnote vS.C. 2012, c. 5, s. 173
Return to footnote wS.C. 2012, c. 5, s. 175
Return to footnote xS.C. 2012, c. 5, s. 178
Return to footnote yS.C. 2005, c. 54, s. 449
Return to footnote zS.C. 1991, c. 45
Interpretation
Marginal note:Definitions
1 The following definitions apply in these Regulations.
- institution
institution means any of the following:
(a) a bank, as defined in section 2 of the Bank Act;
(b) an authorized foreign bank, as defined in section 2 of the Bank Act;
(c) a retail association, as defined in section 2 of the Cooperative Credit Associations Act;
(d) a company, as defined in subsection 2(1) of the Insurance Companies Act;
(e) a foreign company, as defined in subsection 2(1) of the Insurance Companies Act; or
(f) a company, as defined in section 2 of the Trust and Loan Companies Act. (institution)
- maintenance fee
maintenance fee means a fee in relation to a prepaid payment product that is charged after the product has been purchased, other than a fee associated with the holder’s use of the product or of any service related to it. (frais de tenue de compte)
- prepaid payment product
prepaid payment product means a payment card, whether physical or electronic, that is — or can be — loaded with funds and that can be used by the card holder to make withdrawals or purchase goods or services. (produit de paiement prépayé)
- promotional product
promotional product means a prepaid payment product that is purchased by an entity and distributed as part of a promotional, loyalty or award program. (produit promotionnel)
Application
Marginal note:Issued in Canada by institution
2 These Regulations apply to prepaid payment products that are issued in Canada by an institution.
Manner of Disclosure
Marginal note:Clear and simple language
3 Any disclosure referred to in these Regulations must be made in language, and presented in a manner, that is clear, simple and not misleading.
Initial Disclosure
Marginal note:Manner and content
4 (1) For the purposes of subsections 452(1.1) and 570(1.1) of the Bank Act, subsection 385.18(2) of the Cooperative Credit Associations Act, subsections 482(1.1) and 601(2) of the Insurance Companies Act and subsection 438(1.1) of the Trust and Loan Companies Act, the following information must, before a prepaid payment product is issued, be provided in any document that the issuing institution prepares for the issuance of the product, including on the product’s exterior packaging, if any, and be provided in writing to any person applying to the institution for the product:
(a) the name of the issuing institution;
(b) a toll-free telephone number that can be used to make inquiries about the product’s terms and conditions;
(c) the following restrictions on the use of the product, if imposed by the issuing institution:
(i) the fact that the product is not reloadable,
(ii) the fact that the product cannot be used to make withdrawals, and
(iii) any other restriction that could reasonably be expected to affect a person’s decision to acquire the product;
(d) all fees that may be imposed on the product holder by the issuing institution in respect of the product;
(e) if the funds that are loaded on the product are not insured by the Canada Deposit Insurance Corporation, a statement to that effect; and
(f) a statement indicating
(i) in the case of a promotional product, either that the product holder’s right to use the funds that are loaded on the product will not expire or the day on which that right will expire, as the case may be, or
(ii) in the case of any other prepaid payment product, that the product holder’s right to use the funds that are loaded on the product will not expire.
Marginal note:Presentation of fee information
(2) The information referred to in paragraph (1)(d) must be presented in an information box and appear prominently on any exterior packaging or other document referred to in subsection (1).
Marginal note:Exception — application by telephone
5 Despite section 4, if a person applies for a prepaid payment product by telephone, the information referred to in paragraphs 4(1)(a) to (f) must, before the product is issued, be disclosed to them orally instead of in writing.
Additional Disclosure
Marginal note:On issuance
6 (1) For the purposes of subsections 452(2) and 570(2) of the Bank Act, subsection 385.18(3) of the Cooperative Credit Associations Act, subsections 482(2) and 601(3) of the Insurance Companies Act and subsection 438(2) of the Trust and Loan Companies Act, any charges for which a natural person to whom a prepaid payment product is issued becomes responsible by accepting or using the product, as well as the following information, must be disclosed in writing to that person on issuance of the product:
(a) the product’s terms and conditions, including the product holder’s rights and responsibilities with respect to a lost or stolen product;
(b) a description of how the product holder can verify the balance of the funds loaded on the product;
(c) a description of how the product holder may, in certain circumstances, use funds loaded on the product towards partial payment of a purchase; and
(d) the information referred to in paragraphs 4(1)(a) to (f) unless the product is issued in person and that information was disclosed under subsection 4(1) immediately before the issuance of the product.
Marginal note:Other than natural person
(2) An institution must, on issuance of a prepaid payment product to a person other than a natural person, disclose to them any charges for which they become responsible by accepting or using the product as well as the information referred to in paragraphs (1)(a) to (d).
Marginal note:On product
7 For the purposes of subsections 452(2) and 570(2) of the Bank Act, subsection 385.18(3) of the Cooperative Credit Associations Act, subsections 482(2) and 601(3) of the Insurance Companies Act and subsection 438(2) of the Trust and Loan Companies Act, an institution must disclose the following information by setting it out directly on the prepaid payment product or, if the product is electronic, by disclosing it electronically on the product holder’s request:
(a) the name of the issuing institution;
(b) the date on which the prepaid payment product expires, if any;
(c) if it is a promotional product, the date, if any, on which the person’s right to use the funds that are loaded on the product will expire;
(d) a toll-free telephone number that can be used to make inquiries about the prepaid payment product, including balance inquiries and complaints; and
(e) a website address where the information referred to in paragraphs 4(1)(a) to (e) and section 6 can be obtained.
Prohibitions
Marginal note:Fee changes
8 An institution must not increase any fee, or impose a new fee, associated with a prepaid payment product that is issued to a natural person unless
(a) a person has, in their capacity as holder of the product, provided the institution with their name and mailing or email address;
(b) the product holder has been given the opportunity to modify the information referred to in paragraph (a); and
(c) the institution discloses the new or increased fee by
(i) sending a notice to the most recent address provided for the product holder at least 30 days before the effective date of the new or increased fee, and
(ii) displaying a notice on the institution’s website for a period of at least 60 days immediately before the effective date of the new or increased fee.
Marginal note:Use of funds
9 An institution must not impose an expiry date on a prepaid payment product holder’s right to use the funds that are loaded on a prepaid payment product unless it is a promotional product.
Marginal note:Maintenance fee
10 An institution must not impose a maintenance fee on a prepaid payment product holder for a period of 12 months after the day on which the product is activated unless it is
(a) a promotional product; or
(b) a reloadable product and the product holder has given their express consent to the imposition of the fee.
Marginal note:Overdraft
11 An institution must not charge overdraft fees or interest in respect of a prepaid payment product without the express consent of the product holder.
Coming into Force
Marginal note:May 1, 2014
12 These Regulations come into force on May 1, 2014.
- Date modified: