Overview of Consumer Protection in Canada Series – Gift cards/Prepaid cards

Gift card agreements and prepaid purchase card agreements (both open loop and closed loop) are regulated across Canada under consumer protection legislation. Generally, expiry dates are prohibited other than for prepaid cards that are issued for promotional or charitable purposes. Under most consumer protection legislation, a consumer can only be charged fees associated with a lost or stolen prepaid card or personalization of the prepaid card. Dormancy fees may be charged for open loop cards after a prescribed time, in some instances, to a specified maximum amount set out in the applicable legislation. Federally regulated financial institutions, such as banks, loan companies, trust companies and insurance companies, are subject to the Prepaid Payment Products Regulations made by the federal government. The regulations address prepaid cards issued by these types of financial institutions, including many network branded prepaid cards.

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