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Consumer Protection

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Statutes Administered: The Consumer Protection Act

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Under the administration of The Consumer Protection Act, consumers are provided with a forum for the hearing, investigating and mediating of consumer complaints related to almost anything that concerns a consumer except for the purchase of real property.

The Consumer Protection Act is intended to provide protection in consumer related transactions only. It does not provide protection in business to business dealing nor any sales made to companies for business purposes or sales between individuals (such as garage sales etc.).

The Act regulates certain credit arrangements. It provides for the disclosure of any cost of borrowing related to a sale of goods or services where a credit agreement is entered into by a consumer. It also addresses restrictions on the advertising of credit and hire purchases or loans. Prepayment privileges of loans and rebate calculations under the Act protect consumers against extra costs when credit agreements become in default.

The Consumer Protection Act imposes a liability on the part of a seller to the buyer for all duties, liabilities, obligations, and warranty applicable to a sale or hire purchase by the Act or by contract. Also, it protects consumers from all expenses incidental to having the goods serviced under any warranty whether given by the manufacturer, the seller, or a third party in a retail sale under the Act. The Act further imposes on the seller of an extended warranty contract a liability to the buyer for the performance of all obligations under the contract to service or repair the goods, whether or not the seller is a party to the contract and whether or not the seller received a fee for selling the contract.

The Consumer Protection Act regulates vendors and direct sellers (door-to-door sales and other direct sales activities), collection agents and collectors through a licensing requirement. Consumers who enter into contracts as a result of a direct sale are provided with a statutory 10-day cancellation right under the Act. There are other cancellation rights of up to one year provided to consumers where vendors have not complied with certain other requirements specified in the Act or direct sellers regulation. Bonds are required under the licensing requirements of the Act for vendors engaged in direct sales and collection agencies. Where companies fail or refuse to honor obligations to consumers, the bonds provide fair and effective recourse. Consumers, through the Consumers' Office, can make claims against these bonds to recover losses.

The Act sets out the rules pertaining to collection practices. For example, collectors cannot call consumers before 7:00 a.m. and after 9:00 p.m., nor can they call on statutory holidays and Sundays. Collectors cannot threaten debtors with proceeding with any action for which they do not have lawful authority. They cannot collect or attempt to collect from a debtor a greater amount than what is actually owing.

The Consumer Protection Act defines the role and administration of the Consumers' Office. It outlines the duties of the Director under the Act including the investigation of complaints. It requires that all records and accounts of complaints be kept confidential. The role of the Office is to have companies comply with the legislation. However, from time to time compliance is not met. The Act contains an offence section and sets out the penalties to individuals and companies if found guilty for breaches of the Act by the courts.

The Consumer Protection Act provides protection when a credit card is lost or stolen. It sets a limit on liability for $50.00 to the consumers in such instances. It also protects consumers from receiving unsolicited credit cards.

In 1990, The Consumer Protection Act was amended to include a Prepaid Services section which limits memberships sold at a maximum of 12 months and requires memberships to be paid in at least two installments covering approximately equal portions of the length of the contract. Health and fitness clubs fall within this category of prepaid services. This limits consumer losses in these matters to the unused portions of their memberships should the fitness club close down or not comply with the law. It also provides for a 7-day cancellation right and sets out rules pertaining to the content of the contracts. The Act provides for further cancellation rights for non-compliance with the Act by the company.

In 1998, The Consumer Protection Act was further amended to clarify subsection 125(2), which addresses the fee schedule related to prepaid services contracts.

On March 19, 2001, The Consumer Protection Act was amended to include Part XVI, Internet Agreements. This part gives consumers the right to cancel goods or services, prior to delivery, which have been purchased over the Internet, when disclosure requirements have not been met or goods or services are not delivered. It also provides consumers with the right to reverse or cancel a credit card charge where the consumer was entitled to a refund, which the seller failed to provide.

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Another amendment protects consumers against the unauthorized use of credit card information.