A Layman's Guide to the New Ontario Consumer Protection Act

The new Ontario Consumer Protection Act, 2002 came into force on July 30, 2005. The act applies to consumer transactions if either the consumer or the business is in Ontario.

To simplify, the act covers five areas:

A) The right to cancel certain contracts within 10 days.

This includes the following types of contracts:

1. Door-to-Door Sales:

Contracts signed in your home by a person who normally sells goods or services door-to-door where the value is more than $50. This covers businesses such as home improvement and paving contractors, energy brokers, etc. It does not cover contracts signed in your home when you have made arrangements for the company to come to your home. For example, if you call a drapery company for estimates on window coverings in your home, such a contract does not qualify for the 10 day cancellation.

2. Vacation Timeshare:

A consumer can cancel a vacation timeshare agreement, for any reason, within 10 days after receiving a written copy of the agreement. It should be stressed, however, that should you sign a vacation timeshare contract outside the Province of Ontario, you are not protected by the Consumer Protection Act, 2002.

3. Personal Development Services and Facilities:

A contract signed with a fitness club or dance studio can be cancelled, for any reason, within 10 days after receiving a written copy of the agreement. Fitness clubs and dance studios must provide consumers the option to pay by monthly installments.

It is recommended that canceling a contract be done in writing within 10 days by registered mail.

B) Prohibited Practices

1. Advance payments for loan brokers and credit repair are prohibited.

2. Negative Option billing is prohibited.

The negative option billing occurs when a company charges for a new service automatically unless the consumer explicitly refuses it. For example, a lawn care company may leave a flyer in your mailbox stating that they will perform certain services for free one time and will continue to perform these services at a charge of $75.00 per instance if you do not call to cancel. This practice is now prohibited.

C) Internet and Remote Contracts:

1. Internet contracts: contracts entered into on the Internet, where consumers place online orders.

2. Remote contracts: contracts entered into when the business and the consumer are not present together, e.g., by phone, fax or mail.

Companies selling goods over the Internet or by remote contract are required to provide their place-of-business addresses and to issue some form of confirmation of deals once they are completed. These contracts are also subject to the new 30-day delivery of goods and services requirement. A consumer may cancel an internet agreement within 30 days after the date the agreement is entered into, if the supplier does not provide the consumer with a copy of the agreement pursuant to section 39.

D) Final price not to exceed estimate by more than 10%

The final costs of home renovations, moving services and auto repair may not exceed a written estimate by more than 10 per cent. However, a consumer and supplier can agree to amend the estimate or price in a consumer agreement if the consumer requires additional or different goods and services.

E) Leasing

A full disclosure statement must be given to the lessee before entering the lease or before accepting payment. This applies to leases where the term of the contract exceeds 4 months. For example, all new car dealers must provide a full disclosure lease specifying the following: selling price of the vehicle, residual value of the vehicle, the value of a trade-in, if applicable, the annual interest rate as well as total interest charges, any outstanding liens, applicable taxes – for a complete list of full disclosure, please refer to the Consumer Protection Act, 2002. It is necessary to emphasize that the 10-day “cooling off” period does not apply to the purchase of new or used vehicles.

The previous information is presented as a guide only.