Justice

Prepaid Memberships and Services

If you have ever joined a gym, social club or signed up for dance lessons, you have likely entered into a prepaid service contract. These contracts usually require you to enter into an agreement where you pay for services, upfront, in scheduled installments.

To help better understand your rights and responsibilities when it comes to prepaid services, the Consumer Protection Office offers the following information:

Before you sign up for a prepaid service, you should know that:

  • Signing a contract for a prepaid service means committing to pay for a certain period of time, whether you use the service or not.
  • By law, no contract can be for longer than 12 months, but a contract may switch to month-to-month after the first year.
  • You must be allowed to pay for the service in at least two equal instalments.
  • You must receive a written contract that includes your name and the service provider’s name, and outlines the service, start and end dates, total cost and schedule of payments.
  • You have the right to cancel a prepaid service contract for a full refund if you give the business written notice, in person or by registered mail, within seven days (excluding Sundays and holidays) of when you signed the contract. These cancellation rights must be clearly stated on the first page of your prepaid service contract.
  • You do not need to give any reason for your desire to cancel.

Additional tips you should consider before signing includes:

  • Do your research to compare prices and services to ensure you are getting the best value.
  • Ask questions about your cancellation rights and requirements in advance.
  • Look at all the different payment options and see which is best for you.
  • Ask for a free trial before you commit.
  • Ensure the service times are convenient for you and your schedule.
  • Consider any upcoming life changes that may affect your ability to commit long term.
  • Do not feel pressured into committing right away. Take the contract home to review in detail if you feel you need more time.

If you decide to commit to a membership, read all terms and conditions carefully before signing the contract. Keep the signed contract for your records as it contains important information regarding your cancellation rights and payment schedule. Remember, you always have the right to cancel within seven days (excluding Sundays and holidays) of signing.

Questions?

If you have any questions or problems or if you would like more information, contact:

Consumer Protection Office
302-258 Portage Avenue
Winnipeg, Manitoba R3C 0B6
Telephone (Winnipeg and area): 204-945-3800
Toll-free within Manitoba: 1-800-782-0067
Fax: 204-945-0728
Email: consumers@gov.mb.ca
Website: www.manitoba.ca/cca/cpo/