Decision #56328-297Q403

File: 56328-297Q403

Compliance issue

Cashing federal government cheques free of charge
Bank Act, s. 458(4)(a)

A bank charged a consumer to cash two federal government cheques.

Paragraph 458(4)(a) of the Bank Act provides that a bank shall not make a charge for cashing a cheque or other instrument drawn on the Receiver General or on the Receiver General’s account in the Bank of Canada, in any bank or other deposit-taking Canadian financial institution incorporated by or under an Act of Parliament or in any authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), in respect of its business in Canada.

Compliance measure(s) taken

A Letter of Reprimand^{Footnote 1}  noting two violations against the bank.

Compliance considerations

The customer service representative reimbursed the customer as soon as he or she was made aware of the error. As a single employee made the error, the violation was determined not to be systemic.

Corrective measures taken by financial institution

• Reimbursed the customer as soon as the error was brought to the attention of the customer service representative.
• Provided in-branch training to the employees of the branch who were responsible for depositing Government of Canada cheques.
• Continued to implement a series of training and communication initiatives to improve overall compliance across the country, as part of a response to the results of FCAC’s mystery shopping exercise (Spring 2003), and to address this particular legislation.

Outcomes

Consumers have a right to cash their federal government cheques without being charged.^{Footnote 2}  This ensures that all consumers, no matter what their financial situation or banking habits, are able to access their Government of Canada funds. In this case, the customer was reimbursed. The ability to cash federal government cheques for free is an important part of access to basic banking services for Canadian financial consumers.