October 6, 2010
Legislation Protects Consumers From Negative-option Billing: Mackintosh
– – –Bill Takes Effect, Penalties Rise Substantially
Amendments to the Consumer Protection Act that effectively ban negative-option billing are now in effect and penalties for breaches of the act have been increased dramatically, Family Services and Consumer Affairs Minister Gord Mackintosh announced today.
“Consumers deserve to know exactly what they’re buying and want protection from companies that try to charge them for something they didn’t ask for,” said Mackintosh. “Businesses want a level playing field when offering a product or service at a fair price.”
Changes to the act mean companies cannot use a consumer’s failure to say no to the offer of goods or services as the person’s agreement to pay for the product. The changes were initiated as part of Let’s Make a Better Deal, the province’s five-year consumer protection strategy.
For example, if a consumer signs a one-year contract for a service, the company cannot unilaterally renew the contract when the term expires. In this case, the consumer must be asked to renew and must agree to the extension. Additionally, if the agreement is for the regular supply of goods or services, the business cannot make a significant change without the consumer’s consent.
Also, the communication at the time of the agreement must be clear and understandable. If the contract is not clear, or the terms and conditions are advertised in very fine print or displayed so briefly that it is not reasonable to read and understand them, it will be considered negative-option marketing.
Victims of negative-option marketing will have up to one year to demand a refund from the supplier. Once that request is made, the supplier will have 30 days to comply.
Penalties for any breach of the act have increased substantially to a maximum of $300,000 for an individual or corporation. The previous maximum was $50,000 for an individual and $100,000 for a corporation.
Amendments to the act also provide the possibility of restitution for the victim. Courts can now consider the issue of compensation where the consumer has suffered a loss.
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