The new act and its regulations (the "New Legislation") consolidates and modernizes six existing consumer protection laws which will be repealed and replaced by the New Legislation including the Business Practices Act, Consumer Protection Act ("Old Act"), Consumer Protection Bureau Act, Loan Brokers Act, Motor Vehicle Repair Act and the Prepaid Services Act. The New Legislation is intended to harmonize federal, provincial and territorial legislation and provide consistent coverage of consumer transactions.
Generally speaking, the new Consumer Protection Act applies to "all consumer transactions if the consumer or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place". A "consumer" is defined as "an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes" and a "consumer transaction" is "any act or instance of conducting business or other dealings with a consumer".
(There are exceptions to the application of the act. For example, it does not apply in respect of prescribed professional services regulated under a statute of Ontario.)
The New Legislation substantially expands consumer rights and takes into consideration the new era of doing business in Ontario in areas where the Old Act was silent. The New Legislation includes goods and an extensive range of services within its ambit and covers sales, leases and other transactions. The substantial and procedural rights provided to consumers under the New Legislation apply despite any agreement or waiver to the contrary.
The following are some of the key provisions under the New Legislation:
- Suppliers are deemed to warrant that services supplied under a consumer agreement are of reasonably acceptable quality.
- Implied conditions and warranties applying to the sale of goods pursuant to the Sale of Goods Act are deemed to apply (with necessary modifications) to goods that are leased, traded or otherwise supplied under a consumer agreement.
- If an estimate is provided under a consumer agreement, the supplier may not charge the consumer an amount exceeding 10% of the estimate. If the amount charged is greater than 10% of the estimate, the consumer may require the supplier to provide the goods or services at the estimated price.
- Any ambiguity in a consumer agreement shall be interpreted in favour of the consumer.
- A supplier may not demand payment for unsolicited goods or services despite their use, receipt, misuse, loss, damage or theft.
- If a consumer receives goods or services on an ongoing or periodic basis and there is a "material change" in such goods or services, they shall be deemed to be unsolicited from the time of material change (unless the supplier can establish that the consumer consented to the material change). A change is a "material change" if it is of such nature or quality that it could reasonably be expected to influence a reasonable person’s decision as to whether to enter into the agreement for the supply of the goods or services.
- Under the New Legislation, certain disclosures and cancellation rights must be provided to consumers with respect to future performance agreements, time share agreements, personal development services agreements, internet agreements, direct agreements, remote agreements and other consumer agreements.
- No person who is a credit repairer or a loan broker or a supplier who supplies such goods or services may require or accept any payment or any security for a payment, directly or indirectly, from or on behalf of a consumer unless and until the consumer receives the credit or loan of money or such supplier causes a material improvement to the consumer report, credit information, file, personal information, credit record, credit history or credit rating of the consumer.
- No repairer may charge for any work or repairs unless the consumer authorized the work or repairs.
- On the repair of a vehicle, every repairer is deemed to warrant all new or reconditioned parts installed and the labour required to install them for a minimum of 90 days or 5,000 kilometres, whichever comes first.
- Lenders must disclose the cost of borrowing under credit agreements.
- Customers who lease are afforded similar protections as those who buy. A disclosure statement must be provided to a lessee prior to entering the lease.
- Any person who makes representations or causes representations to be made about the cost of a lease (orally, in writing, or any other form) must do so in accordance with the prescribed requirements.
- An individual who is convicted of an offence under the New Act is guilty of an offence and is liable to a fine of not more than $50,000 or to imprisonment for a term of not more than two years less a day, or both, and a corporation convicted of an offence under the New Act is liable to a fine of not more than $250,000.
With only two months to go before the regulation comes into force, and considering the scope of the New Legislation as compared to the provisions of the Old Act, companies doing business in Ontario should act now in conducting a thorough review of current consumer agreements and business practices to ensure compliance with the New Legislation prior to July 30, 2005.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.