Prepaid cards: know your rights
Prepaid cards (physical, like plastic, or electronic) are preloaded or can be loaded with funds. You may use them to buy goods and services and sometimes make cash withdrawals. Financial institutions issue prepaid cards linked to payment card network operators such as American Express, Mastercard, and VISA. You can buy prepaid cards online, by telephone or at retail businesses.
Learn more about using prepaid cards.
By law, federally regulated financial institutions that issue prepaid cards must provide you with key information about them. This does not apply to prepaid cards issued by provincially regulated financial institutions or retailers.
Your right to information about prepaid cards
All federally regulated financial institutions that issue prepaid cards must provide you with certain information:
- before issuing the card
- directly on the card and its packaging, if any
- electronically upon request, if it’s an electronic card
Federally regulated financial institutions other than banks that issue prepaid cards must also provide you with certain information:
- when issuing the card
They must disclose the information in a manner and using language that is clear, simple and not misleading.
Information to be disclosed about the prepaid card
Before issuing the card, federally regulated financial institutions must disclose information to you, such as:
- the name of the card issuer
- information about expiry dates, if any
- a toll-free telephone number you can call to ask about the card and to file complaints
- restrictions on the use of the card
- all charges that may apply (must be presented in an information box, on the card’s exterior packaging, if any)
- a statement that the Canada Deposit Insurance Corporation (CDIC) doesn’t insure the funds (when that’s the case)
- a website address where you can get the information as listed above, among others
Banks must also disclose the following information before issuing of the card:
the card’s terms and conditions, including your rights and responsibilities if you lose it or someone steals it
how you can verify the balance of the funds on your card
how you may use the funds for partial payment of a purchase
Federally regulated financial institutions other than banks must disclose the above additional information on issuance of the card. This doesn’t apply when they issued a prepaid card in person and already disclosed this information before issuing it.
Information on the prepaid card
Federally regulated financial institutions must provide information directly on the prepaid card, or its exterior packaging if any. If there’s exterior packaging the fees must be presented prominently in an information box.
This includes information such as:
- the name of the card issuer
- the day on which the card expires, if any
- the day on which the funds will expire, if any (only for promotional cards)
- a toll-free telephone number you can call to ask about the card and to file complaints
- a website address where you can find the information listed above
Prepaid card charges
Federally regulated financial institutions can only impose certain charges and only under certain conditions.
Maintenance charges
Federally regulated financial institutions may impose maintenance charges after you buy the prepaid card. These charges aren’t associated with using the card, or any service that relates to it. They can only do this 1 year after you’ve activated the prepaid card unless it’s a:
- promotional card, or
- card that can be reloaded with more funds and you’ve given express consent to do so
Overdraft charges
Federally regulated financial institutions can only impose overdraft charges for prepaid cards if you provided express consent. Using the prepaid card doesn’t mean that you provided express consent.
Learn more about providing express consent for financial products and services.
Changes in charges or new charges
Federally regulated financial institutions that issue prepaid cards can only increase charges or impose new ones if:
- you provide them with your name and mailing or email address, and you can update this information
- they disclose the new or increased charges by:
- sending a notice to the most recent address provided at least 30 days before the change takes effect
- displaying a notice on their website for at least 60 days before the change takes effect
Expiry dates on prepaid cards
Federally regulated financial institutions can only set expiry dates on certain cards and only under certain conditions.
For prepaid cards
Federally regulated financial institutions can’t set an expiry date on funds loaded onto prepaid cards they issue. The card itself can have an expiry date. They must provide you with a statement that says that your right to use the funds won’t expire. There may be a fee to transfer the funds and to issue a new card.
For promotional prepaid cards
Promotional cards may have an expiry date on the funds. Certain companies distribute these cards as part of a promotional, loyalty, or award program. They must show the expiry date on the card and in a statement that indicates whether the funds expire. They must do so before they issue the card.
When these rights apply to you
These rights apply when you’re dealing with a federally regulated financial institution like a bank or federal credit union.
Find out if your financial institution is federally regulated.
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