New regulations have come to effect in Canada on fees associated with prepaid cards offered by a number of financial institutions, credit card companies and retailers.
Finance Minister Joe Oliver announced several measures, including a ban on maintenance fees for at least one year after the prepaid card activation, a ban on assigning expiry dates to the cards and a requirement to disclose clearly the fees on the card packaging.
"As part of Canada’s economic action plan, our government is committed to protecting consumers and saving Canadians money," said Oliver.
Prepaid cards can be used as an alternative to cash, allowing users to make purchases or withdraw money from a pre-set amount that has already been loaded onto the card.
Most of them come with fees and charges, including monthly maintenance fees, activation fees and charges for ATM withdrawals.
The new regulations apply to all federally regulated institutions, including banks, and the Financial Consumer Agency of Canada (FCAC) will be responsible for enforcing compliance with the new rules.
They also apply to all prepaid cards currently in the market, regardless of when cards were purchased.
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