Consumer Protection Information | Credit, Loans & Collections

Two layers of protection

If you have a credit card, line of credit, loan or an account that has moved to collection, at least two sets of rules apply to you at once. Federal law, chiefly the Bank Act and its associated cost-of-borrowing regulations, governs how federally regulated financial institutions — banks and federally chartered trust companies — disclose the cost of credit. Provincial law, in Ontario the Consumer Protection Act, 2002 and the Collection and Debt Settlement Services Act, governs consumer contracts more broadly and regulates how collection agencies and collectors may contact you.

These regimes overlap by design rather than by accident. Federal oversight focuses on the lender at the point of origination — what must be disclosed before you sign. Provincial oversight focuses on the ongoing relationship — how a creditor or its collection agency may behave once an account is delinquent. Understanding which body governs which part of the relationship is the fastest way to know where to direct a complaint.

Federal disclosure rules and the Bank Act

Federally regulated banks must comply with cost-of-borrowing disclosure regulations made under the Bank Act. In practice this means a bank must give you, before you enter into a credit agreement, clear information about the annual interest rate, the total cost of credit over the term where applicable, any fees or charges, the payment schedule, and your rights if you miss a payment or want to pay the loan off early. For credit cards, the disclosure box on your application and statement — showing the annual interest rate, grace period, and minimum payment calculation — exists because of this framework.

The Financial Consumer Agency of Canada (FCAC) supervises federally regulated financial institutions for compliance with these consumer protection obligations, including the Bank Act's disclosure rules, the Code of Conduct for the credit and debit card industry, and voluntary commitments banks have made on matters such as low-cost accounts and complaint handling. FCAC does not resolve individual account disputes or order compensation, but it investigates patterns of non-compliance and can take enforcement action against an institution.

The criminal interest rate limit

Section 347 of the Criminal Code makes it a criminal offence to enter an agreement to receive interest at a criminal rate, historically defined as an effective annual rate above 60%. Federal amendments passed in 2023 lower this general ceiling and also introduce a separate, lower cap specific to payday loans, which remain additionally regulated at the provincial level in Ontario under the Payday Loans Act, 2008 (see our dedicated guide on payday loan rights). The criminal rate limit applies broadly across consumer and commercial lending in Canada, regardless of the lender's licence type.

"Interest" for this purpose is interpreted broadly by the courts to include most fees, fines, penalties and charges connected to the advancing of credit, not merely the interest rate stated on the face of an agreement. A lender that structures fees to disguise an effective rate above the criminal threshold does not escape the prohibition by relabeling the charge.

Ontario's Consumer Protection Act, 2002

Ontario's Consumer Protection Act, 2002 (CPA) is the general statute governing consumer transactions in the province, including many credit agreements, and it applies alongside — not instead of — federal disclosure rules where a provincially regulated lender is involved. Among other things, the CPA:

• Requires clear, accurate disclosure of credit terms in consumer agreements, including future performance agreements and remote or internet agreements;
• Prohibits unfair practices such as false, misleading or deceptive representations about a product, service or the existence of a debt;
• Gives consumers cancellation rights in defined circumstances, such as agreements entered into as a result of an unfair practice, or door-to-door and remote agreements that do not meet disclosure requirements; and
• Is enforced by Ontario's Ministry of Public and Business Service Delivery, which can investigate complaints, issue compliance orders and prosecute offences.

Collection agency and debt settlement conduct specifically is governed by a separate, more detailed statute — the Collection and Debt Settlement Services Act — which we cover in full in a dedicated compliance guide.

Prohibited collection practices

Whether a debt is owed to a bank, a retailer or has been placed with a third-party agency, Ontario law prohibits certain collection tactics outright. A collector may not:

• Use threatening, profane, intimidating or coercive language;
• Contact you at your place of employment after being told not to;
• Contact family members, neighbours or an employer to pressure payment, rather than solely to confirm your location or employment;
• Misrepresent the amount owed, the legal status of the debt, or the consequences of non-payment;
• Contact you outside the permitted calling hours or more frequently than permitted once contact has been made; or
• Contact you directly, rather than your lawyer, once the collector has been told in writing that you are represented by counsel on the matter.

Your disclosure rights as a borrower

As a borrower, you are generally entitled to receive, before or at the time you enter a credit agreement: the annual interest rate and how it is calculated; the total cost of borrowing in dollars where the term is fixed; a schedule of payments; any fees, insurance charges or penalties that apply; and the conditions under which the lender can change the rate or demand early repayment. Once an account is in default and placed for collection, you are entitled to written notice identifying the original creditor and the amount claimed before a collector may contact you by telephone, and to have any disputed debt verified rather than simply demanded.

If you are unsure whether a demand you have received is legitimate, or whether a fee has been disclosed properly, ask the creditor or agency in writing for a full account statement and the original credit agreement. You can also review our frequently asked questions for common scenarios, or contact FDR Asset Group if the account in question is with us.

Where and how to complain

Where you take a complaint depends on who you are dealing with:

• Federally regulated banks and federal credit unions: first use the institution's internal complaint process, then escalate to the applicable external complaints body, and ultimately the Financial Consumer Agency of Canada (FCAC) for regulatory compliance concerns.
• Ontario-licensed collection agencies, debt settlement companies, and most consumer contracts: Ontario's Ministry of Public and Business Service Delivery, which administers the Consumer Protection Act, 2002 and the Collection and Debt Settlement Services Act, and maintains a public registry of licensed agencies.
• Payday lenders operating in Ontario: the same Ministry, under the Payday Loans Act, 2008.
• Provincial credit unions and caisses populaires: the Financial Services Regulatory Authority of Ontario (FSRA).

Keep dated copies of all correspondence, call logs and account statements before filing a complaint — regulators generally ask for a documented timeline of attempts to resolve the issue directly with the creditor or agency first.

Frequently asked questions