Mr. Chair, I appreciate the opportunity to participate in this debate on an issue that probably takes place in every household between students and families. There can be no question that credit cards today are an integral part of our lives. Every household from coast to coast to coast uses credit cards or charge cards.
The Canadian credit card market is one of the most competitive in the world, with more than 600 varieties of cards. Banks, credit unions and retailers, as was mentioned earlier, are the principal users offering a variety of products to meet the credit and transaction needs of its customers. Convenient payment options and low borrowing rates are offered. Point programs, insurance coverage and retail discounts are also among the various services that are offered. Year end bonuses accumulated based on usage over the year are given back to customers.
Credit cards are a flexible and convenient tool today as our society has changed. Visa cards and MasterCards are accepted at an estimated 650,000 outlets in Canada and more than 30 million locations worldwide. In 2003 it was estimated there were 74.3 million credit cards circulating in Canada, 50.4 million Visa or MasterCards and 23.9 million American Express cards, Diner Club cards and merchant issued credit cards from places like The Bay, Canadian Tire, and the list goes on.
These statistics leave no doubt that Canadians are active users of credit cards and will continue to do so in the foreseeable future. As I said to my colleague earlier and have mentioned in years past, this is an option somebody could take on. Nobody has forced me or you, Mr. Speaker, or anyone else to take the card and use it. It is our choice. If I wish to respond to the marketing of a certain credit card company, I will take on that responsibility.
When we were facing this issue 10 years ago we felt that the consumer was not being informed. We felt that there should have been more options to the consumer and I was pleased. I recall that you and I, Mr. Speaker, were on Parliament Hill together after the 1993 election and there were issues that were very important to us. It was not the party affiliation that brought us together. On the contrary, it was issues like this because we cared for the average Canadian.
I remember that there was no party separation on these issues. We worked together on this issue to make sure that the providers of charge cards pointed out the information, that there were flexible terms available and that there was not just one card that was offering all the bells and whistles, insurance, points, et cetera. There were the pared down charge cards that offered literally nothing except the opportunity to use the card if people did not have cash in their pockets or they were short one week. They would pay the service charge on whatever was purchased the following week or at the end of the month.
I am pleased to fast forward to 12 years or so down the road and say that the providers of these charge cards have indeed put out information telling consumers that they can have option A, option B or option C. I have said repeatedly that I believe we are a pretty smart and informed society but that it is incumbent upon us to pick up the information and read it. With the access we have today to the Internet, we have information at the snap of our fingers.
When other members talk about capping interest rates on credit cards at 5% above prime, I wonder why I should pay 5% above prime if I have an option of paying 2% over prime. It does not make sense, does it?
Nevertheless, as I mentioned earlier in my questions and comments, with all this in mind, the government's financial sector decided to create the Financial Consumer Agency of Canada, an agency that was established to consolidate and strengthen the oversight of consumer protection measures in the federally regulated financial sector and to expand consumer education, which is what I have been talking about.
The FCAC's creation was one in a series of initiatives resulting from an extensive period of study and public consultation on the financial sector reform initiative. As I said, we consulted with Canadians. We went out and talked to Canadians. We asked for their input. As a result, we formed the FCAC.
As a government, our vision is to establish and maintain a fair and competitive financial marketplace in which Canadians can easily obtain reliable, objective information to help them make informed financial decisions.
We also believe in the marketplace where financial institutions meet their obligations to consumers, where transparency is the rule rather than the exception and where non-compliance is dealt with swiftly and effectively. This is where the FCAC does come in, and of course there are stats to prove, in terms of the consumer who now has an outlet, that they can go to this body and make their complaint. It is incumbent upon the FCAC to move forward to make sure that these institutions, these card providers or whoever, are complying with the legislation, maintaining the code of conduct and respecting the public commitment it made to protect the interests of consumers.
The FCAC opened 1,437 compliance cases in the past which resulted in 22 cases of non-compliance to voluntary code of conduct and public commitments. There were 39 violations of the consumer provisions leading to 20 cases where compliance measures were taken. Some of the measures taken were three notices of violations and monetary penalties of $10,000, $5,000 and $50,000 were applied. If an organization such as this was not there who would the consumer have been able to go to in order to make a complaint about not being fairly treated? All of a sudden the FCAC is there. That is really what I want to talk about.
Yes, we can get into the interest rates, the charges and the percentages which I think is part of the debate as well. The agency also does something that we talked about back in 1994-95. The agency distributed well over 300,000 copies of publications and brochures just in 2003 and in 2004.
Part of its mandate is to inform the consumer and to make sure the consumer is aware of what is happening. Consumers need to know that it is there if they have a problem, a question or if they feel they have been mistreated or cheated. The organization was established by the government to make sure that consumers are not abused.
The agency has also been mandated to expand consumer awareness on financial issues such as credit cards, but more so, it gives me great pleasure to know that the FCAC publishes a semi-annual report entitled, “Credit Cards and You”. I visited high schools, because we talked about our youth, with the Canadian Bankers' Association to talk about a program called, “Managing Your Money”. I am pleased that the banks and the institutions have taken the initiative to go out to the community, to go right into the high schools and talk to students.
With respect to the interest rates charged, certainly today some of these figures are exuberant percentages. I first want to say that I do not agree with these exuberant overcharges. However I am also mature and well educated enough to know that if I do not want to use a credit card I simply will not use it. Why would I create debt? Yes, I might go and use it knowing very well that I could make my monthly payment and knowing very well there is an 18%, 17%, 16%, 2% or 4% charge, whatever type of card I have. I have the option at the end of the month to pay the $200 that I used the previous month and with no interest charge. I look forward to any questions.