Monday, 19 May 2014
New set of rules for Prepaid Credit Card Services
Ottawa has launched new set of rules for prepaid credit card services that would be beneficial for the customers. It includes abolition of high processing fees and termination of expiry dates. Every year about 8 million cards are issued under brand names such as MasterCard, American Express and Visa.
“We have heard far too much that Canadians felt like they’ve been gouged,” federal Minister of State for Finance Kevin Sorenson told a news conference in Ottawa.
The new rules that are formulated would wave off expiry dates and maintenance fees for a year after the activation of cards. Also, any other terms and condition associated with such cards should be clearly mentioned on the external packing.
“I’m hoping that I’ll never receive another call from somebody that said, ‘We thought we had $500 on our credit card and after 10 months we have nothing left because of fees and charges,’ ” association president Bruce Cran told reporters at the Ottawa news conference.
However, consumer affairs critic Glenn Thibeault said that other types of fees might also apply. “If the Conservatives really cared about Canadian consumers, these would have come in to effect months ago, ahead of the holiday season,” he said.
“Visa believes the additional guidance issued today regarding prepaid payment products regulations will improve consumer awareness of any fees. We look forward to reviewing the full regulations,” Visa’s head of new products, Sue Whitney, said in an email.
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“Consumers are best served when we can help them make informed choices about payment products they are using,” MasterCard Canada said in a statement.
Canadian Bankers’ Association supported the idea of communicating to the customers beforehand about terms and conditions.
“In fact, the banks already follow many of the measures outlined in today’s announcement, including clearly stating any applicable fees on the outside packaging and providing toll-free numbers to check card balances,” the association said in a statement.
“The regulations don’t go far enough,” said John Lawford, executive director of the Public Interest Advocacy Centre. “There should be no expiry and no fees unrelated to cost of actually providing credit.”
Thus, such improvement in prepaid credit card market only proves that it has a bright future.Recently allied market research published a report on Global Prepaid credit card Market. The report forecasts the global prepaid credit card market to reach $168 billion by 2015. This might interest lots of investors.