What Is It?
Prepaid cards — including Visa/Mastercard prepaid cards, retail gift cards, and reloadable prepaid cards — are regulated under the Payment Card Networks Act and the FCAC’s prepaid payment products regulations. The rules prohibit many of the most consumer-unfriendly practices: expiry of the card value, dormancy fees in the first year, and obscuring fees in fine print.
What Federal Rules Require
No expiry of the underlying funds: The monetary value loaded on a prepaid card cannot expire. If a card has an expiry date, the issuer must replace it with a new card at no charge, and the full balance must be available on the replacement card.
No dormancy fees in the first 12 months: Issuers cannot charge a dormancy or inactivity fee during the first 12 months after the card was last loaded with funds.
Fee disclosure: All fees must be clearly disclosed before purchase — on the packaging, in the cardholder agreement, or in another easily accessible format.
Minimum 5-year card validity: The card itself (the physical card) must remain usable for at least 5 years from the date of last load.
What Federal Rules Do NOT Require
- No ban on fees after 12 months. After 12 months of inactivity, dormancy fees may be charged — though they must have been disclosed upfront.
- No prohibition on network fees (Visa/Mastercard fees). Monthly maintenance fees on reloadable prepaid cards are permitted if disclosed.
- These rules apply to federally regulated issuers only. Cards issued by provincially chartered credit unions or small companies not regulated federally may have different rules — check with your provincial consumer protection office.
Quebec — Stronger Protections
Under Quebec’s Consumer Protection Act, gift certificates (including prepaid cards used as gift cards) cannot expire at all, and dormancy fees are prohibited entirely — not just for 12 months. This is a stronger protection than the federal standard.
What to Do If You’ve Been Charged Illegally
Step 1: Contact the card issuer and cite the Payment Card Networks Act (PCNA) and FCAC prepaid product regulations. Request a refund of illegal fees or restoration of your balance.
Step 2: If the issuer refuses, file a complaint with FCAC at fcac-acfc.gc.ca. FCAC supervises federally regulated financial institutions’ compliance with the PCNA.
Step 3: For cards issued by retailers (not banks), file a complaint with your provincial consumer protection office.
What Most People Don’t Know
- Promotional and loyalty cards are exempt. Cards used exclusively for a business’s loyalty program (Air Miles, PC Optimum, Scene+) are not subject to the prepaid card regulations — they’re governed by different rules.
- Prepaid cards that require ID/registration (for anti-money laundering purposes) may be exempt from certain provisions — check the fine print.
- You can ask for a balance refund in cash on cards near expiry. Some issuers will provide a refund of small remaining balances (under $10–$25) rather than a replacement card.
- The $0 fee myth. Even “no fee” prepaid cards often have fees for ATM withdrawals, currency conversion, or inactivity after year 1. Read the disclosure before loading significant funds.
Frequently Asked Questions
A retailer’s gift card says it expires in 2 years. Is that legal?
If the issuer is a federally regulated financial institution (bank, federal credit union), the card value cannot expire under FCAC rules. If the issuer is a retailer directly (not a bank), your rights depend on provincial law. Quebec bans expiry entirely. Other provinces vary — check your provincial Consumer Protection Act.
I lost my prepaid Visa card with $200 on it. Can I recover the balance?
If the card is registered (you provided your name and contact information when activating it), the issuer can cancel the lost card and issue a replacement. Unregistered prepaid cards are like cash — if lost, the balance is generally unrecoverable.
Is the balance on a prepaid card insured by CDIC?
No. CDIC (Canada Deposit Insurance Corporation) does not insure prepaid card balances. These are not deposits.
The card says “fees may apply after 12 months of inactivity” — how much can they charge?
Federal rules don’t cap the fee amount — they only require disclosure. A fee of $2–$3/month after 12 months of inactivity is common and legal if disclosed. Quebec remains an exception where such fees are prohibited entirely.