A lack of objection or silent acquiescence does not qualify as “express consent”, Canada’s financial consumer watchdog concluded in announcing a $350,000 fine against the Royal Bank of Canada (RBC) for failure to obtain such consent to higher credit card limits from 2015 to 2017.

The Financial Consumer Agency of Canada ruled that RBC violated regulations by increasing the credit limits of certain credit card holders without their consent. In its review of many audio recordings of both complaint calls and other normal calls, FCAC noted:

• the bank lacked scripts guiding in-branch staff on how to present the offer or obtain consent,
• its training manual contained minimal references to consent,
• and the bank lacked the ability to investigate and track cancellations.

n an overwhelming percentage of the complaint calls received, customers said they had not consented to the credit limit increase.

FCAC reviews of calls indicated the credit limit increase was infrequently discussed at all, or presented “as a ‘fait accompli’ or as a benefit for being a good customer. Customer reactions of “hmm” and “okay” were accepted as consent.” The regulator said the positive-only positioning lacked appreciation for the regulatory intent of requiring express consent – that having access to additional credit is a serious matter for the customer to consider, requiring appropriate information and a clear decision of ‘yes’ or ‘no’.

The FCAC decision also noted: “The requirement for express consent cannot be satisfied by a lack of objection or an apparent acquiescence.”

The judgment was reached in 2019. RBC asked for the penalty to be halved and that it not be named, arguing it exercised all reasonable steps to prevent the violation. The bank noted that a written confirmation was sent to each increase, as required by the regulations for oral consent, and that it improved its process for obtaining consent in both November 2016 and April 2018.

But in announcing the judgment, FCAC Commissioner Judith Robertson noted the “weakness of the RBC preventative measures is apparent from a review of the training material, call recordings, transcripts and other documentation” and that “in some of the cases reviewed, the credit limit increase was not discussed at all.” The judgment also observed that when RBC received complaints, its response was to simply reverse the credit limit increase, without a “consistent mechanism to ensure that the instances of failure, when revealed, triggered action to correct employee behaviour and enhance future compliance.”

In opting to identify RBC in the judgment, Robertson wrote: “It is my view that publication would serve to encourage RBC to continue its program of compliance improvement and enhance its ability to prevent and detect future non-compliance.”