Your Rights and Responsibilities: Accounts

Opening an account

• Your rights
  
  
• What do you have to do to open an account?
  
  
• What identification (I.D.) do you need?
  
  
• Information you must receive when you open your account
  
  
• When can a bank refuse to open a personal bank account?
  
  
• What if the bank won't open an account for you?
  
  
• What if the bank wants to check your credit report?
  
  
• How the bank uses your credit information
  
  

Your rights

Under Canadian law, you have certain rights when you are dealing with a bank. Every bank branch must display and make available information that explains your rights. You have the right to a personal bank account, even if:

• you don't have a job;
  
  
• you don't have money to put in the account right away; or
  
  
• you have been bankrupt.
  
  

What do you have to do to open an account?

To open an account, you have to:

• go to the bank in person, and
  
  
• show the bank some acceptable identification (I.D.).
  
  

You must use original I.D., not a photocopy.

What identification (I.D.) do you need?

There are different combinations of I.D. you can use. You have three choices. You must have at least one piece of I.D. from Box A (below).

You can also show other types of I.D. To find out what they are, call FCAC toll-free at: 1-866-461-3222.

Information you must receive when you open your account

When you open a deposit account, a financial institution must provide you with the following information in writing (either at or before the time the account is opened):

• a copy of the account agreement;
  
  
• for an account that pays interest, the rate of interest on the account and how it will be calculated (this rule doesn't apply to an account opened with a balance in excess of $150,000);
  
  
• all of the charges that apply to the account;
  
  
• how you will be notified of any increase in those charges, and of any new charges to the account;
  
  
• the institution's procedures if you have a complaint about any charges on your account;
  
  
• the institution's policies with respect to hold periods on deposits.
  
  

When can a bank refuse to open a personal bank account?

A bank can legitimately refuse to open a personal bank account for you if:

• the bank has reasonable grounds to believe that you'll use the account to break the law or commit fraud;
  
  
• you've committed a crime or fraud against a financial institution during the past seven years;
  
  
• it has reasonable grounds to believe that you intentionally provided false information when you opened the account;
  
  
• it has reasonable grounds to believe that opening the account would expose its employees or customers to physical harm, harassment or abuse;
  
  
• you do not agree to let the bank verify if the four circumstances mentioned above can apply to you and to verify the pieces of identification that you present to the bank; or
  
  
• you can't provide acceptable identification.
  
  

For more information on when a bank can refuse to open an account for you, call FCAC.

What if the bank won't open an account for you?

1. Ask the bank for a letter saying that it will not open an account for you. The bank must give you this letter. By law, the bank must also tell you how to contact FCAC.
   
   
2. Tell the bank you want to make a complaint. By law, all banks must have a complaint-handling process.
   
   
3. Call FCAC. We're here to help.
   
   

What if the bank wants to check your credit report?

When you ask to open a personal bank account, the bank often contacts a credit-reporting agency to get a copy of your credit report. Credit-reporting agencies are organizations that maintain credit reports for millions of Canadian consumers. Banks can use your credit report to doublecheck the information you provide them. Your file will show and confirm to the bank information such as the following:

• your personal identification (your name, address, birthdate, etc.)
  
  
• your employment history
  
  
• your current and past debts
  
  
• whether you pay your bills on time
  
  
• your bankruptcy history, and any judgments and/or third-party collections, if any.
  
  

Your file will also indicate to the bank any confirmed misuse or irregularities related to your address, social insurance number or telephone number.

This information will help the bank determine the reasons for refusal that apply to you. It will also help the bank decide what you can do with your account (see the next section: "How the bank uses your credit information").

By law, if the bank contacts a credit-reporting agency to obtain information about you, it can't normally use this information to deny you an account. It can only do so if the information contained in your credit file provides the bank with reasonable grounds to believe that you have been involved in dishonest or fraudulent activity. The fact that you have a poor credit rating or have declared bankruptcy in the past is not, by itself, a valid reason for refusing to open an account for you.

How the bank uses your credit information

The bank may use the information it obtains from the credit bureau check to help it decide what you can do with your personal bank account. The information will help the bank:

• establish how much money you can withdraw from your account through an automated banking machine;
  
  
• determine whether you will be able to deposit cheques at an automated banking machine and how long the bank will place a "hold" on the money you deposit into your account by cheque; and
  
  
• decide whether to provide you with a chequing account or a basic savings account.