Nunatsiaq Online
NEWS: Nunavut November 16, 2016 - 1:10 pm

Amendment would protect Nunavut cheque cashers from fee rip-offs

Changes to Consumer Protection Act would let GN limit or prohibit cheque cashing fees

STEVE DUCHARME
Because of the limited services offered by chartered banks in Nunavut, the North West Co. now offers WE Financial cards, which can be loaded with cash from pay cheques and government benefit cheques for spending at North West Co. stores. The cards come with a lengthy fee schedule. (FILE PHOTO)
Because of the limited services offered by chartered banks in Nunavut, the North West Co. now offers WE Financial cards, which can be loaded with cash from pay cheques and government benefit cheques for spending at North West Co. stores. The cards come with a lengthy fee schedule. (FILE PHOTO)

Proposed changes to Nunavut’s Consumer Protection Act would protect Nunavut residents from exorbitant fees when they attempt to cash cheques issued by governments, such as child benefit and income tax refund cheques.

The proposed amendments—given second reading Oct. 25—would prohibit or limit cheque-cashing fees in Nunavut.

Because many Nunavut communities don’t have chartered bank branches, northern businesses like the North West Co. or Arctic Co-ops Ltd. have for many years offered cheque cashing services—for a fee.

Those cheque cashing fees, along with fees for transferring money from one community to another, have long been a source of complaint.

The North West Co. now has its own financial services system that uses prepaid WE Financial Visa cards that can be used to deposit federal and territorial benefit payments.

The North West Co. charges a long list of fees for use of its WE cards.

People who receive federal government cheques may opt for direct deposits, but those who wish to receive paper cheques may continue to do so.

The North West Co. also uses Link cards, which are used to load income support payments. Income support clients must spend that money only at North West Co. stores.

Under the amendments, the Nunavut government would be granted the power to limit or remove fees as they see fit, or designate a body or agency to oversee their administration and oversight.

The new amendments would also protect people against “unconscionable consumer transactions,” while also introducing new definitions for misleading advertising, intentionally inadequate repairs or service, or extortionist lending.

That includes dramatically increased penalties for individuals and corporations found in contravention of the act, striking out fines between $1,000 and $5,000 and replacing them with fines ranging from $10,000 to $50,000.

Nunavut’s Consumer Protection Act was grandfathered into the territory from legislation first passed in the Northwest Territories in 1994.

The act has not been amended since 2012.

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