The changes, coming into effect October 1, 2005, are being made to the Canadian Code of Practice for Consumer Debit Card Services (the debit card code), an industry code of conduct which outlines the rights and responsibilities of debit card users and industry practices and responsibilities surrounding the use of debit cards.

The debit card code has been developed and updated in consultations among consumer groups, financial institutions, retailers and federal and provincial governments. These new changes provide debit card users with more specific details and timelines for the information they will receive from their financial institution after reporting an unauthorized transaction. They include:

• Specific notification that the card issuer will investigate the unauthorized transaction(s) and a decision on reimbursement will come from that investigation;
• The card issuer will respond back to the cardholder no later than 10 business days after the unauthorized transaction is reported to the card issuer;
• If not all funds will be reimbursed to the cardholder, then the card issuer will provide information it believes shows that the cardholder contributed to the unauthorized use of the card;
• If a problem cannot be resolved between the cardholder and the bank, the bank will provide written information on how the customer can escalate the matter through the bank's formal complaint-handling process.

"In most cases, banks already exceed the new standards, but these changes provide customers with additional peace of mind in knowing that they will receive the necessary information quickly," said Caroline Hubberstey, Director of Public and Community Affairs at the Canadian Bankers Association. "The debit card code has always provided excellent protections for customers, and victims of debit card fraud will get their money back from their financial institution. The changes enhance these protections."

Incidents of debit card fraud are relatively low in Canada. In 2004, about one-tenth of one per cent of the debit cards in circulation were impacted by a debit card skimming incident and card issuers fully reimbursed victims for their losses. Banks have extensive electronic account monitoring in place which automatically detects unusual transactions in accounts. They also dedicate substantial resources to preventing debit card fraud from occurring and cooperate with police as part of their criminal investigations.