Data and statistics included below were provided by the Financial Consumer Agency of Canada.
Number of complaints linked to balance protector insurance on credit cards:
2001: 5 (from inception on Oct 24 to Dec 31)
2002: 17
2003: 50
2004: 66
2005: 34
2006: 28
2007: 27
2008: 32
Total: 259
73 out of the 259 cases were compliance cases.
None resulted in a violation, however four cases were found in non-compliance to the Canadian Bankers Association Code of Conduct for Authorized Insurance Activities.
Non-compliance cases:
2003 = 1
2005 = 2
2006 = 1
2007 = 0
2008 = 0
* * *
Nature of complaints (main topics):
1. Insurance and related charges were added to the credit card account without the consumer's consent. (This is the most popular topic.)
2. Complaints related to claims and claim payments, such as claim was denied, claim payment is lower than expected or are not applied to the credit card in time to meet the due date, claim process is too long)
3. Difficulties with the insurance cancellations, i.e. the insurance was not cancelled when it was requested, takes a long time before the insurance is cancelled.
4. Policy documents are not clear or consumers didn't receive them.
5. Some concerns were raised about negative option billing (Note: Negative option billing is when an FI asks the consumer to advise them if they don't want the insurance (instead of advising if they wish to subscribe) before a specific date, or otherwise the consumer will be enrolled in the insurance automatically. The major FRFI has agreed to not use this practice in a public commitment called Undertaking on Unsolicited Services found on CBA's website (see below). This commitment does not apply to credit cards issuers such as MBNA, Citibank, Capital One, Amex, Sears, Canadian Tire, etc.)
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