Financially vulnerable British Columbians will benefit from better protections that come into effect on Sunday, May 1 with new legislation to regulate lenders of high-cost credit products.
“The coming into force of this new framework strengthens consumer protection and improves financial education to help people make important decisions,” said Mike Farnworth, Minister of Public Safety and Solicitor General. “Those using or considering high-cost financial services will benefit from regulation and oversight of the industry.”
As part of the 2019 amendments to the Business Practices and Consumer Protection Act, under the new framework, businesses that offer high-cost credit products, such as installment loans and lines of credit with more than 32% interest, will be required to obtain an annual license and be regulated by BC Consumer Protection.
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 amendments also establish new requirements for transparency and borrower protection. The rules prohibit certain charges, establish requirements for credit agreements, and establish the rights and remedies of borrowers.
These improvements are part of the government’s 2018 Financial Consumer Protection Action Plan to strengthen consumer protection and improve affordability for the most financially vulnerable people in British Columbia. Previous phases included enhanced financial protections for consumers using payday loans and government check cashing services.
A new Consumer Financial Education Fund, also coming into effect May 1, 2022, will improve consumer financial education and awareness across the province. The fund will be supported by industry as part of its annual fee.
As the province’s consumer protection authority, Consumer Protection BC will administer the new framework and the Consumer Financial Education Fund. Information on high cost consumer credit products and the business licensing process is available on the Consumer Protection BC website.
Action plan for the financial protection of consumers:
Regulating high-cost credit products to protect consumers:
Online resources for borrowing money:
Information on British Columbia consumer protection laws – Consumer Protection BC: