Ontario’s amendment to the Consumer Reporting Act may, at first glance, appear to be a progressive move towards improving transparency. Section 12(3) of the Act proposes that consumer reporting agencies include creditors’ email addresses as a point of contact on consumer disclosures, ostensibly to make disputes and inquiries more accessible. But beneath the veneer of convenience lies a host of unintended consequences—ones that pose cybersecurity risks, operational inefficiencies, and regulatory inconsistencies that threaten to undermine both consumers and lenders.

The Cybersecurity Time Bomb

Requiring creditors’ email addresses in consumer disclosures introduces significant vulnerabilities. Unlike encrypted channels or secure portals, email communication is notoriously insecure and prone to exploitation. Cybercriminals could leverage this requirement to launch phishing schemes, posing as financial institutions to deceive consumers into divulging sensitive information. The results? Identity theft, financial losses, and damaged credit profiles.

The financial institutions implicated in such fraud would bear the brunt of reputational harm, eroding trust in the system. For many lenders, this policy forces a dilemma: comply with Ontario’s mandate or adhere to global best practices in cybersecurity, which discourage the use of email for sensitive communications. Most institutions have invested in secure platforms to prevent precisely these risks, making this requirement both redundant and risky.

Operational Chaos for Lenders

For lenders, the mandate would create logistical challenges. Managing an email channel for consumer inquiries requires additional resources to monitor inboxes, respond to messages, and ensure timely redirection to secure communication methods. Smaller financial institutions, in particular, may struggle with the costs and staffing demands.

Email also introduces inefficiencies. Unlike phone calls or secure online portals, email responses are inherently slower and prone to miscommunication. Consumers may face delays or bounce-back errors, creating frustration rather than fostering transparency. Furthermore, lenders could find themselves inundated with irrelevant or misplaced inquiries, compounding operational burdens and detracting from their ability to address genuine concerns.

As it is widely accepted that email is an insecure channel for sensitive PII, the consumer will inevitably be redirect to a more secure method making this errant channel circular and unneeded.

A Patchwork of Regulation

This mandate adds a layer of inconsistency to Canada’s financial regulatory landscape. No other province imposes a similar requirement, forcing lenders that operate nationally to navigate conflicting rules. For a financial ecosystem reliant on uniformity, this divergence is not just inconvenient but poses operational and compliance risks. The CLA continually advocates for harmonization nationally to allow companies to provide efficient services.

Existing communication methods already provide effective solutions. Secure phone lines and online portals allow consumers to resolve disputes and access their financial information safely. Adding email, an inherently less secure channel, introduces unnecessary complexity without delivering tangible benefits.

A Well-Intentioned Misstep

The Ontario government’s intentions are commendable—making consumer disclosures accessible and dispute resolution straightforward is a worthy goal. However, mandating email contact for creditors is a poorly conceived solution. It jeopardizes cybersecurity, overburdens financial institutions, and confuses consumers for marginal gains in convenience.

By focusing on secure, robust systems, Ontario could achieve its transparency goals without introducing new vulnerabilities. Policymakers should reconsider Section 12(3) to avoid turning Ontario’s consumer reporting framework into a cautionary tale of unintended consequences.

Sign up for our Finance Summit Series