The B.C. Court of Appeal has tossed out an appeal by Bank of Nova Scotia in its case against the Office of the Superintendent of Financial Institutions over the telemarketing of credit insurance.

A lower court had dismissed a petition brought by the Bank of Nova Scotia and Optima Communications, a telemarketing company engaged by the bank to carry out telemarketing on its behalf, against the Superintendent of Financial Institutions, the Financial Institutions Commission and the Attorney General of British Columbia.

In August 2000, the Superintendent gave notice of his intention to order Scotia and Optima to cease the solicitation of credit insurance applications in B.C.

The Superintendent relied on the Financial Institutions Act, which permits such solicitations to be done only by a bank directly, or by a person licenced under the Act. Optima is neither. It simply provides contract telemarketing services using the customer lists of the bank’s credit card division, and its personnel are not licensed.

In response to the bank’s argument that the provincial legislation did not apply to it, the court ruled that the telemarketing was not part of the “business of banking” but part of the “business of insurance”, and that it was therefore subject to provincial regulation. The judge declined to grant the bank relief from the proposed orders of the Superintendent.

The appeals court found that that the bank and OSFI would suffer harm as a result of the granting or refusing of the stay, “but that the balance of convenience is against the granting of a stay. The application is dismissed.”

http://www.courts.gov.bc.ca/jdb-txt/ca/02/01/2002BCCA0141.htm