Canadians still struggle with basic financial rules, rights: study

Canadians still struggle in some areas of financial literacy, a government-commissioned study reveals. Joe Raedle/Getty Images

Canadians still don’t have a firm grasp of their rights and responsibilities when it comes to credit cards and other financial matters, a recent government study reveals.

The study, commissioned last year by the Financial Consumer Agency of Canada (FCAC) at a cost of $76,112 to taxpayers, was conducted over the summer of 2016 and delivered on Feb. 1.

As required by law, it was made public this week.

Among other things, it reveals that just over half of Canadians surveyed didn’t understand a standard rule involving cash advances.

Fifty-one per cent of respondents “continued to believe incorrectly that ‘you won’t pay interest on a cash advance as long as you pay your credit card balance in full by the due date indicated on your statement,'” the polling firm, Ipsos Public Affairs, notes in its executive summary of the report.

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Three-in-ten Canadians didn’t know that they alone are responsible (and not the bank) if they lose their wallet and someone finds it and gets a hold of both their pin and their bank card, resulting in a loss of funds.

And one-in-five of us still believes that a bank can issue a credit card without a customer’s prior approval.

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“We know that improving Canadians’ awareness of their financial rights and responsibilities is a long term challenge,” said FCAC spokesperson Lynne Santerre in an email.

“There is still much room for improvement. For instance, the research points to gaps in awareness of financial rights and responsibilities particularly for youth, people over the age of 55, low-income Canadians and those without a university degree.”

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The study did highlight a number of bright spots, however.

For instance, a full 85 per cent of people knew that when you open an account, the bank must give you a written statement of all service fees and charges.

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Seven-in-ten respondents (71 per cent) knew there is a time limit for reporting fraudulent transactions on your credit card to your bank. And nearly everyone surveyed (94 per cent) knew that they could cancel their credit card simply by contacting the financial institution that issued it.

Overall, Santerre said, Canadians’ awareness of their financial rights and responsibilities has remained relatively stable over the last five years, with some marginal improvements in certain areas.

“We are looking at areas where awareness did improve in order to better understand how to move the needle forward elsewhere,” she said.

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The results of the Ipsos study showed, for instance, that 70 per cent of Canadians are now aware that banks do not permit debit and credit card holders to share their PIN with anyone, including family members. That’s a slight bump up from 67 per cent who said the same in surveys conducted in 2006 and 2011.

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“We worked with financial institutions to get this message out to consumers through a pilot campaign in 2016,” Santerre explained.

“Given the measurable impact of this collaborative approach, we will continue to engage with financial institutions and other stakeholders to reach out to Canadians about their financial rights and responsibilities.”

The FCAC also looks at consumer complaints, web traffic, domestic and international trends and emerging issues to determine where to focus its educational efforts and resources, she added.

To learn more about your financial rights and responsibilities, click here. 

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