FCAC calls on banks to ensure their customers are fully benefiting from e-alerts

OTTAWA, ON, March 20, 2025 /CNW/ - Today, the Financial Consumer Agency of Canada (FCAC) published the findings of a thematic review conducted to find out how small and medium-sized banks (SMSBs) have implemented electronic alerts (e-alerts).

E-alerts enable consumers to make timely and informed decisions about their finances, including avoiding unnecessary fees. All Canadians who bank with federally regulated financial institutions, such as banks, have the right to receive e-alerts under Canada's Financial Consumer Protection Framework (the Framework). These are sent out when their account balance or available credit falls below a certain threshold ($100 is the default, but consumers can customize the amount).

Thematic reviews are an important part of FCAC's risk-based approach to supervising banks' compliance with consumer protection laws and regulations. Thematic reviews provide valuable insights into specific topics or themes, helping to assess compliance and identify risks.

In monitoring the implementation of the Framework, FCAC identified a higher risk of implementation issues with e-alerts among small and medium sized banks (SMSBs). For that reason, FCAC focused its thematic review on those financial institutions.

While the SMSBs assessed in FCAC's review took steps towards meeting this new requirement, there were several areas for improvement. For example, not all consumers were fully benefitting from e-alerts due to delays, incomplete information or missing contact details.

Each of those SMSBs has been informed of the findings specific to their institution and is required to take corrective actions. FCAC will monitor their response to make sure that they comply with the requirements.

FCAC expects all federally regulated financial institutions, including Canada's 6 largest banks, to review its report on e-alerts to assess their own compliance and to address any issues or deficiencies in a timely manner.

Quotes

"The Financial Consumer Agency of Canada puts the rights and interests of Canadians first.
E-alerts are an important new consumer protection measure that was introduced as part of the Financial Consumer Protection Framework. Canadians have the right to clear, timely and accurate information to help them avoid unnecessary fees. For this reason, I expect all banks to ensure their customers are receiving the right information at the right time through e-alerts. FCAC will continue to supervise and enforce banks' compliance with e-alerts and all the new and enhanced consumer protection measures under the Framework."

Shereen Benzvy Miller, Commissioner, Financial Consumer Agency of Canada

Quick facts

• The Financial Consumer Agency of Canada (FCAC) protects Canadians by supervising the compliance of federally regulated financial entities, such as banks, with their legislative obligations, codes of conduct and public commitments, and by strengthening Canadians' financial literacy.
  
  
• The Financial Consumer Protection Framework (the Framework) was a milestone in consumer protection in Canada that included more than 60 new and enhanced consumer protection measures.
  
  
• The Framework included a new requirement for banks to send e-alerts to consumers, as set  out in section 627.13 of the Bank Act.
  
  
• For this thematic review, FCAC required all 41 federally regulated small- and medium-sized banks (SMSBs) to complete a survey on their implementation of e-alerts.
  
  
• As part of the thematic review, FCAC selected 6 SMSBs to participate in a more in-depth assessment, which was conducted over 8 months. The banks selected were a representative sample of the size, business models, and regional presences of SMSBs.

Associated links

• Supervisory highlights: FCAC publishes reports sharing key findings, observations, and insights resulting from its supervisory activities and regulatory approach.
  
  
• Supervisory Highlight: Report on Findings – Thematic Review on Electronic Alerts

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SOURCE Financial Consumer Agency of Canada