Canada’s eight biggest banks have pledged to provide consumers with more information about joint accounts, powers of attorney and collateral mortgages.
Minister of Finance Joe Oliver announced the voluntary policy on Wednesday in Toronto.
Touting the plan as a way for Canadians to become more financially literate, Oliver said the banks have pledged to disclose more information about joint accounts and powers of attorney with a focus on the needs of seniors.
Many seniors allow a relative to have signing authority on a joint account or turn over power of attorney, leaving them vulnerable to theft or abuse by relatives, he said.
The new policy also demands that banks explain the difference between conventional mortgages and collateral mortgages to any new mortgage customers. Collateral mortgages cannot be easily transferred to other banks without paying fees, which can sometimes amount to thousands of dollars.
Banks have committed to put educational information online, put up posters in the banks and to train bank employees on explaining the implications of these products to customers.
“Our government is standing up for consumers and saving Canadians money,” Oliver said, standing in front of a sign that said "consumers first."
Earlier this year, the big banks made a voluntary commitment to create more low-cost and no-fee bank accounts, under an agreement with the federal government.