Consumer Protection Act, 2002

Canadian Association of MoversFall Conference

September 19, 2005

Purpose of Presentation

To review the requirements of the new Consumer Protection Act with specific reference to CAM members’ issues.

To answer your questions about the new law. If I don’t have the answer today, I will get it to you via John Levi.

To hear your concerns about the new law.

The New Law

On July 30, 2005, Ontario’s new Consumer Protection Act, 2002 (CPA) came into force.

The CPA brings together and updates six existing consumer protection laws:– Business Practices Act– Consumer Protection Act– Consumer Protection Bureau Act– Loan Brokers Act– Motor Vehicle Repair Act– Prepaid Services Act

The New Law

The new CPA applies to any kind of agreement to supply goods and services to consumers in exchange for payment, and transactions related to such agreements. The CPA covers:– individuals who are acting for personal, family or

household purposes;– sales, lease or other transactions;– to consumer transactions if either the consumer or

the supplier is located in Ontario.

Does not apply to “non-consumer” transactions such as business to business dealings – as when moving a business/office.

Principles

Guiding Principles:- Marketplace fairness - Reliable disclosure ... clarity - Flexibility to adapt to future needs

Rights granted under the Act cannot be waived by contract.

Any ambiguities in any consumer agreement drawn up by a supplier are to be interpreted in the consumer’s favour

Business Rights The CPA is intended to be fair.

Experience tells us that some customers are unreasonable.

Consumers cannot misuse the CPA to get out of paying legitimate costs, fees etc. to suppliers, service-people.

CPA s.100 requires the court to grant relief (refunds, etc.) to consumers unless it would be inequitable to do so.

The Ministry has, and uses, discretion in deciding which complaints to investigate. We’re fair, too!

The CPA and TTA

The two laws are not necessarily in conflict: it is possible to comply with both.

TTA would not appear to operate factually in most household moves where contract is usually to pay balance upon delivery and not the full amount before delivery.

In the event of a conflict, the CPA will prevail. – you must live within your estimate plus 10%– you must not withhold delivery to force payment of

amounts above the estimated price

Estimates An estimate is binding whether written or verbal, in-person or remote.

The estimate is only for services set out in the original agreement. If the customer wants more, they have to pay more – but mover needs to be clear about this and get customer to agree.

You can charge for “extras” if you disclose in the contract, including delays, especially those caused by consumer.

Nothing prevents you from estimating a maximum that accounts for the unforeseen and coming in under budget. Otherwise, business should assume some risks that are beyond customer control (traffic, weather). And it should assume the risks of low-balling.

Estimates

The Ministry recognizes the need to educate consumers about estimates:– how the 10% rule applies– “extras” cost more– business right to include costs for delays in contract

Will work with CAM on a e-brochure for posting on website. Other sectors (e.g. home renos) have similar issues.

Delivery and Payment

The CPA does not diminish right of mover to insist on payment before releasing goods.

The CPA prohibits withholding goods to force consumer to pay extra, undisclosed fees (i.e. not the costs of extras requested by the customer)or to renegotiate price.

Withholding goods to extract extra money is an offence and may be prosecuted. It has been a problem in the past.

Cooling-Off Period

If contract signed in consumer’s home, the consumer can cancel the contract up to ten days after receiving a written copy – no reason required.

Business is entitled to notice from consumer within those ten days. In a “rush move” scenario, a mover is entitled to payment upon rendering service.

The consumer is entitled to full refund of any deposit upon cancellation.

Failure to refund is an offence. The consumer can also sue in Small Claims and get punitive damages.

Internet and Remote Contracts Contracts done by internet or remote (snail mail, e-mail, phone) must

include prescribed information and provide the consumer opportunity to accept or reject. You must provide consumer with copy of contract.

Consumer can cancel contract for up to 7 days after receipt if he/she discovers that required information is missing or if opportunity to refuse terms or make corrections was not offered immediately after the contract was negotiated.

The consumer is entitled to full refund of any deposit upon cancellation.

Failure to refund is an offence. The consumer can also sue in Small Claims and get punitive damages.

Enforcement

CPA imposes fines up to $50K (individuals) and $250K fines (corporate) for violations. Jail terms of up to 2 years less day possible.

Ministry prosecutes unfair business practices, which generally involve deceptive misrepresentation compounded by failure to provide refunds where the consumer is entitled to one (e.g. for non-delivery of service).

Ransoming goods is expressly prohibited – a problem in moving sector that the CPA targeted.

Shoddy service is not an offence. BUT the CPA does include implied warranty to services, including moving.

Compliance and Enforcement Process

graduated response:

1. intake and “triage”

2. mediation ... not every breach is intentional

3. inspection ... business education visits

4. investigation ... prosecution

civil enforcement: remedies are enforceable thru court with the addition of punitive/exemplary damages

administrative enforcement – Director’s orders

the Buyer Beware List

Focused Enforcement Strategy Ministry will focus on key areas where:

– we have many complaints– abuses are serious– we need to increase awareness of new laws

Strategy will include:– prior warning to industry thru various channels– education visits by inspectors– focused, aggressive investigation, prosecution– maximum publicity to warn public, deter bad actors– Buyer Beware List on website

Focused Enforcement Strategy

Key areas include:

– home renovations

– car repairs

– fitness clubs

– air purifiers (door-to-door)

– MOVERS ... spring 2006

Why movers?:

– “ransoming” is egregious ... can usually be linked to deceptive practices as well ...

– drive home new anti-ransoming offence

– complaints not numerically huge

Focused Enforcement Strategy

How do you decide what specific operators to pursue?:– process is complaint-driven– chronic violator or unresponsive to enquiries – amount of $$ at stake– victims: elderly? ESL? youth?– prevalence of type of complaint – example needs to be

made

CAM’s ROLE

Help out with Estimates brochure

Keep up the good work on educational initiatives for consumers.

Help us get warnings out to bad actors – although we know they’re not your members!!