OTTAWA – Ottawa is moving ahead with new regulations on so-called prepaid credit cards, but not in time for the holiday shopping season.
A source says the federal government will bring in an array of regulations governing prepaid cards, including an end to expiry dates and a prohibition on charging maintenance fees for the first year.
The cards, often given as gift, will also need to clearly display all fees and conditions associated with their use on their exterior packaging.
However, government sources say the effective date for the new regulations won’t be until May.
The new rules build on a proposed regulations suggested by Finance Minister Jim Flaherty last fall.
The announcement is expected to be made in Ottawa on Tuesday by junior finance minister Kevin Sorenson and by Maxime Bernier, the minister of state for small business.
The Harper government has made protection of the consumer a key plank of its agenda leading up to the 2015 election campaign.
In last month’s throne speech, the government said it would take steps to reduce cellphone roaming charges, force cable companies to unbundle TV packages and seek ways to reduce the retail price gap between merchants in Canada and the United States.
An official said the prepaid card industry is rife with hidden and confusing fees that effectively drain them of their worth over time.
While relatively new, the sector is growing and in 2011 was estimated at $850 million.