Financial Consumer Agency of Canada sides with CFIB on "leasing" costs
OTTAWA, Feb. 13, 2013 /CNW/ - The Canadian Federation of Independent
Business (CFIB) welcomes today's decision by the Financial Consumer
Agency of Canada (FCAC) to clarify and strengthen rules that prevent
some unfair practices in the credit card industry.
The FCAC has clarified rules around the application of the Code of
Conduct for the Credit and Debit Card Industry in Canada (the Code)
that address concerns raised by CFIB. These changes include the
practice by some rogue players in the credit card industry to
circumvent the Code by splitting contracts to trap small merchants into
"We commend the FCAC and other industry players for siding with small
merchants by clarifying acceptable business practices in the Canadian
payments industry," said CFIB president and CEO Dan Kelly. "The Code is
doing what it was intended to do - protect consumers and merchants."
FCAC provided the credit card industry with guidance on the following
issues raised by CFIB:
Inappropriate sales and business practices: no altering of signed contracts without merchant consent; no quoting
of rates that will not be honoured; give merchants copies of contracts.
Disclosure to merchants in multiple provider agreements: Contracts for debit/credit card processing services, especially for
those businesses with multiple provider agreements, must be clear and
easy to understand, and include certain information specified by FCAC.
Multiple contract cancellation penalties, costs or fees: The Code presently allows merchants to cancel their credit/debit
contracts without penalty if their fees go up. However, some
Independent Sales Organizations were trapping merchants by applying
large exit penalties to separate contracts for leased equipment. It has
been clarified that the right to cancel a credit/debit processing
contract without penalty also applies to any related contracts.
CFIB spearheaded the creation of the Code in 2010, and has continued to
work closely with the federal government and agencies like FCAC to
protect small businesses from unfair treatment by the payments
industry. In the days ahead, CFIB hopes for more good news, including a
long-awaited ruling from the Competition Tribunal on further measures
to help small merchants.
As Canada's largest association of small- and medium-sized businesses,
CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes
direction from more than 109,000 members in every sector nationwide,
giving independent business a strong and influential voice at all
levels of government and helping to grow the economy.
SOURCE: CANADIAN FEDERATION OF INDEPENDENT BUSINESS
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