Dealing with your finances can be overwhelming, especially if you don’t have accurate facts about your consumer rights. Unfortunately, according to a recent study by the Financial Consumer Agency of Canada (FCAC), it shows that many Canadians are not aware of their consumer rights and responsibilities surrounding their finances.
Some highlights of the study include:
- Fifty-one per cent of Canadians believe that if you pay off the balance of a cash advance before the payment due date that you won’t be charged interest, which is incorrect
- Sixty-nine per cent are clear on their rights if they have a problem with a financial institution
- The vast majority of Canadians (85 per cent) know that when you open up a bank account the bank must provide you with a document outlining fees.
- Ninety-four per cent are aware that you can cancel your credit card simply by contacting your financial institution
- Sixty-five per cent are aware that all fees must be listed on the package of prepaid cards
- Forty-three per cent know how to dispute an entry on their credit report
“While this study does indicate that Canadians are aware of some of their consumer rights and responsibilities, it also reveals that there is a large gap to fill when it comes to financial literacy,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
“It is essential to fill that gap with accurate information. If you are not aware of how credit and financial products function, you could be overpaying in interest as well as making yourself vulnerable to identity theft and other financial problems. Protect yourself by learning more,” says Schwartz.
Here are some facts on common financial products and scenarios.
A cash advance is unlike a regular purchase made on your credit card. Interest is charged immediately when the advance is taken, without a grace period. In many cases, the interest rate is higher for a cash advance than for a regular purchase, so cash advances are a costly way to use your card.
What happens if you lose your debit card?
Let’s say your wallet gets stolen and someone gets their hands on your debit card and your PIN number and withdraws funds. Unfortunately, it’s you and not your financial institution that is on the hook for the missing money. The reason for this it is your responsibility to not share your PIN number with anyone.
Avoid this by not writing your PIN number down at all, or storing it somewhere away from your debit card.
What are my responsibilities with joint accounts?
In the case of a joint account, both account holders are equally responsible for the account. In the scenario when a primary credit cardholder adds an individual on to the card, it’s the primary cardholder that is entirely responsible for the debt.
Reporting fraudulent credit card activity
Many credit card companies have zero liability programs for unauthorized transactions and are good at detecting unusual transactions. If you are travelling, you should report to your credit card company where and when you are going, so they don’t see a change in location or any of your purchase behaviour as suspicious.
While there is no time limit on reporting fraud, it is recommended that you get in the habit of checking your statement frequently. The sooner you identify a problem, the sooner it can be corrected.
Has your lack of financial literacy contributed to your debt problem? Learn more about budgeting and how to pay down your debt more quickly. Call us at 1-888-294-3130 or try our free online debt analysis.