Financially vulnerable British Columbians will have better protections coming into force on Sunday, May 1 with new legislation to regulate lenders of high-cost credit products.
“Bringing this new framework into force strengthens consumer protections and enhances financial education to assist people in making important decisions,” said Mike Farnworth, Minister of Public Safety and Solicitor General. “Those who use or are considering high-cost financial services will benefit from regulation and oversight of the industry.”
As part of 2019 amendments to the Business Practices and Consumer Protection Act, under the new framework, companies that offer high-cost credit products, such as instalment loans and lines of credit with more than 32% interest, will require annual licensing and regulation by Consumer Protection BC.
This oversight will help ensure that businesses understand and comply with these new requirements, and that consumers are protected and can make informed choices when using high-cost alternative financial services.
The changes also establish new transparency requirements and borrower protections. Rules prohibit certain fees, set requirements for credit agreements and establish borrower rights and remedies.
These improvements are part of government’s 2018 Consumer Financial Protection Action Plan to strengthen consumer protections and improve affordability for the most financially vulnerable people in B.C. Previous phases included enhanced financial protections for consumers that use payday loans and government-cheque-cashing services.
A new Consumer Financial Education Fund, which also comes into effect May 1, 2022, will enhance consumer financial education and awareness throughout the province. The fund will be sustained by the industry as part of their annual fees.
As the Province’s consumer protection authority, Consumer Protection BC will administer the new framework and Consumer Financial Education Fund. Information about high-cost credit products for consumers and the licensing process for businesses can be found on Consumer Protection BC’s website.
Consumer Financial Protection Action Plan:
Regulation of high-cost credit products to protect consumers:
Borrowing money online resources:
Information about B.C. consumer protection laws – Consumer Protection BC: