Know Your Rights!

The code of conduct for the credit and debit card industry is overseen by the Finance Consumer Agency of Canada. It first came into effect in 2010 the latest update came into affect on March 7, 2017 the most important change in this version is the requirement of a “fee disclosure box”

The purpose of the code was to bring a more even playing field to businesses that accept credit and debit cards. Before the code businesses were signed up to one sided, complicated contracts:

  • Terms and conditions were referenced but rarely given to businesses even if they were the type was often small and the information very complicated
  • Contracts renewed automatically for long terms and cancelling involved giving notice within a specific time slot.
  • Cancellation were often (and still are) very large involving “Liquidated Damages”.
  • Fees were subject to increase at any time and businesses were unable to cancel without incurring a cancellation fee
  • Fees were hard to understand and often some fees were buried in the terms and conditions (note still complicated but can’t be buried).
  • Leases for terminals ran for 5 years which the processing contract ran for 3, cancelling the processing would leave you with 2 years of lease to pay off.

Important Effects for Businesses:

  • Any time your fees are changes or new ones added you can cancel within 90 days of being able to calculate the effect of the change with no penalty, including the ability to cancel any lease that has been arranged by the processor (including “non-cancelable” leases). Processors must give 90 days notice of the change and be specific. Note this includes full benefit of a reduction in the Interchange fees paid by the Processors
  • No “negative option” acceptance (if you don’t say no you get the new service).
  • The contract terms should be clear, simple and not misleading (this needs some work by some processors)
  • A “Fee Disclosure Box” must be added to all processing contracts and be available to all merchants after a change in fees upon request. All businesses should be receiving this document as an update shortly.

What it Does Not Do:

There is only so much any government can do if businesses don’t check their contracts before reading them, don’t monitor their statements or don’t know their rights the government and the code can’t help. Unfortunately the business is still very complicated, numerous pricing system hundreds of fees all calculated in different ways and sales people and companies willing to exploit this at the expense of the merchant.

If you have questions and you want an honest answer with no obligation contact us at any time.


To download a PDF version with our notes click the link below

Code of Conduct 3-7-17 with our notes

Also available at the FCAC site