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Canadian Agency Sees Practices “Not in Line” with Code of Conduct

The Financial Consumer Agency of Canada has released a guide that seems to indicate the payments industry’s compliance with the Code of Conduct for the Credit and Debit Card Industry in Canada may not be up to snuff.

Two key provisions (Elements 1 and 3) are identified as portions of the Code with which the industry may have some trouble complying. Some of the issues are spelled out below. Please click through to the FCAC website for the full guidance, as well as some handy links to additional guidance on the Code:

Issue #1: Sales and business practices

FCAC has received a number of complaints related to sales practices that did not promote increased transparency and as such are not in accordance with Element 1 of the Code. These practices created greater confusion and less transparency, and often misled merchants regarding the terms of the merchant-acquirer agreement.

Issue #3: Multiple contract cancellation penalties, costs or fees

In monitoring compliance with the Code, FCAC has encountered situations where merchants have signed a merchant-acquirer agreement with a participant4, to later discover that in addition to the contract with the participant, they had actually entered into additional contracts for related services (“related service contracts”) that each contained different cancellation clauses and related penalties, fees or costs.

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