THE CANADIAN PRESS
MONTREAL - Several financial institutions were ordered Thursday to pay more than $200 million to Quebec credit-card holders when a court ruled the institutions broke consumer-protection laws.
Quebec Superior Court Judge Clement Gascon found that nine banks and Desjardins unjustly charged clients during the conversion process of foreign currencies for credit-card transactions made abroad.
The judgment says the charges cannot be billed to consumers before a 21-day grace period.
A class-action suit took aim at financial institutions that offered Visa, MasterCard or American Express credit cards between 2001 and 2007. Gascon's ruling ordered each company to pay different sums.
Michel Arnold of Option consommateurs, a consumer-protection group, called the judgment a huge victory for consumers.
The decision comes a month after federal Finance Minister Jim Flaherty unveiled new rules for banks and other credit-card issuers requiring clearer information and a minimum 21-day interest-free period on new purchases made with plastic.
However, Flaherty has no intention of limiting card interest rates, which range from about nine per cent to twice that much for bank-issued cards, and typically from 19 to 28 per cent for cards from big department stores and other retailers.
Under the new regulations, the 21-day grace period on new purchases applies even if an outstanding balance is carried forward from the previous month, as long as the full balance is paid by the current month's deadline.
The new regulations will also require that credit card applications and contracts feature a simple summary box of "all salient information, such as interest rates, grace periods and fees."
Additionally, monthly statements will have to show how long it would take to pay off a balance by making only minimum payments.
