Small business welcomes fixes to unfair credit card practices

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 exorbitant fees.

"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.


For further information:

For more information, please call Gisele Lumsden at 416-222-8022 or

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