CALGARY — Ottawa is moving to tighten consumer protections against fraud by requiring banks to obtain explicit customer consent before enabling electronic money transfers on personal accounts, a change federal officials say is aimed at reducing financial scams that cost Canadians hundreds of millions of dollars each year.Blacklock’s Reporter reports that the new requirements are contained in amendments to the Financial Consumer Protection Regulations and are scheduled to take effect July 1, 2027.“The objective is to ensure banks’ systems manage consumer access to personal deposit account features in a manner that permits consumers to make informed decisions,” the Department of Finance said in a Regulatory Impact Analysis Statement released Saturday.Under the new rules, federally regulated banks will be required to secure customer consent before activating electronic funds transfer capabilities on personal deposit accounts, including wire transfers, global money transfers and Interac e-Transfers.Banks will also be required to establish policies and procedures for investigating suspicious transactions and notifying customers when potentially fraudulent requests are detected.The federal government said the changes come as fraud losses continue to mount across Canada.According to the RCMP’s Canadian Anti-Fraud Centre, Canadians reported losing $704 million to fraud in 2024, the latest year for which data is available. However, federal officials suggested the actual losses are likely far higher.“This is an underrepresentation as it is likely to only represent 5 to 10% of actual fraud losses,” the Analysis Statement said..Finance department rushed plan for Sharia mortgages despite warnings .Finance officials noted the Anti-Fraud Centre received approximately 109,000 fraud reports in 2024. Based on estimates that only a fraction of fraud incidents are reported, the department said the true number of cases could range between 1.1 million and 2.2 million annually.Contrary to common assumptions, seniors are not the age group most likely to be targeted successfully by fraudsters.The Analysis Statement cited Anti-Fraud Centre data showing Canadians under the age of 50 are more likely to fall victim to fraud schemes. However, those over 50 tend to suffer greater financial losses when they are victimized.The regulatory changes also follow a series of court decisions examining the responsibilities banks owe customers who become victims of fraud.In a 2025 ruling by the British Columbia Civil Resolution Tribunal, adjudicator Amanda Binnie found banks have a duty of care to warn customers about potential fraud risks.“I accept a bank owes a duty of care to its customers to warn of potential fraudulent schemes,” Binnie wrote.The case involved a customer of the Canadian Imperial Bank of Commerce who mistakenly transferred $2,000 to the wrong recipient through an electronic transfer..Bank of Canada admits another forecasting miss as recession concerns grow.Binnie ruled the bank owed the customer a duty of care but noted the specific obligations banks have regarding mistaken e-transfers remain unclear and fall outside common public understanding.A separate Alberta case involving the Toronto-Dominion Bank also highlighted concerns about banks' obligations to protect customers from fraud.In that matter, an 81-year-old customer withdrew a total of $241,730 through a series of transactions kept just below the $10,000 reporting threshold under federal anti-money laundering legislation before sending the funds to fraudsters.An Alberta Court of King's Bench associate judge criticized the bank’s apparent position that it had no obligation to question or intervene in such transactions, writing that the bank appeared to believe it owed “no duty of care at all” to determine why a customer was withdrawing or spending their money or to decline carrying out the customer's instructions.Federal officials said the new regulations are intended to strengthen safeguards for consumers while helping financial institutions detect and prevent suspicious activity before losses occur.
