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Are there any laws in Canada that regulate the advertising of the cost of credit?

All Canadian provinces and territories have regulations that impose controls on advertisements on the cost of credit, which are usually found in the Consumer Protection Act of the Cost of Credit Disclosure Act. All these regulations require that any advertising include the cost of borrowing as the “annual percentage rate”, which is usually defined by a detailed mathematical formula.

Penalties for not adhering to these regulations vary from province to province. In some provinces not properly disclosing interest rates will result in credit charges being cancelled or, in some cases, the lender not being able to collect at all. In all provinces, the legislation provides for fines for lenders and directors and officers of corporations that contravene the law. The legislation does not apply to mortgages or to goods, which cost less than $50.00. Harmonizing consumer protection legislation across Canada has been proposed to provide uniformity nationally, to simplify the disclosure rules and to reduce the cost of compliance. If you have questions regarding particular instances of credit advertising, you can direct your questions to the Financial Consumer Agency of Canada. (Phone number 1-888-461 3222, e-mail info@fcac-acfc.gc.ca and web site address www.faca-acfc.gc.ca).