Ontario Joins National Partners To Protect Consumers

Archived Release

Ontario Joins National Partners To Protect Consumers

Ministry of Consumer Services

Fraud Awareness Month Puts Focus On Dishonest Business Practices QUEEN'S PARK, ON, March 1 - Consumers should shop carefully and be alert to sales pitches that sound too good to be true, Government Services Minister Gerry Phillips said today as he kicked off Fraud Awareness Month in Ontario. "Consumers should always be on guard when buying goods or services - the best way to do that is for consumers to ensure they are dealing with legitimate suppliers," said Phillips. "Although we are focusing on fraud awareness this month, obviously consumers should shop carefully and be alert all year round," Phillips said. "The vast majority of business owners in this province are honest - it is the dishonest individuals, who prey on innocent consumers and vulnerable groups like seniors, who we want to put out of business." The Fraud Awareness Campaign objective is to educate consumers about fraud, encourage the reporting of fraud and help make Canada a hostile environment for the perpetrators of fraud. Ontario is joining more than 70 partners in the country-wide campaign including other governments, law enforcement agencies, consumer groups and private sector companies. The McGuinty government has taken a number of steps recently to better protect consumers, especially seniors, and expose fraudulent activities including - Passed a tough new Consumer Protection Act featuring the most sweeping and comprehensive changes to Ontario's consumer laws in more than 30 years - Strengthened enforcement resources at the ministry's Consumer Services Branch including the hiring of three additional investigators - Launched a discussion paper with stakeholders to identify legislative reforms that will combat identity theft and educate consumers to the growing problem - Created the Consumer Beware List, an online database listing businesses with unresolved complaints and convictions - Distributed more than 220,000 Fraud Free calendars featuring tips and advice for consumers to avoid frauds and scams - Published seven consumer brochures on a variety of consumer topics available in eight languages - Created an online fraud quiz available on the ministry's website to help consumers avoid being defrauded. Under Ontario's new Consumer Protection Act, fines for individuals and corporations have been increased. Maximum jail terms have been increased. The act also strengthens consumer protection by ensuring businesses keep consumers informed during transactions and improving a consumer's right to cancel a transaction. "This legislation is a significant advance in consumer protection," said Joan Huzar, president of the Consumers' Council of Canada. "Ontario's new consumer laws are a model for other jurisdictions to follow." Fraud Awareness Month is being led by the Fraud Prevention Forum, which is chaired by Industry Canada's Competition Bureau. The forum is made up of governments, law enforcement agencies, consumer groups and private sector companies. The campaign features Phonebusters' "Recognize it. Report it. Stop it." program. The Canada-wide initiative is designed to educate consumers to the existence of fraud and urge them to report dishonest business practices. Phonebusters is a national anti-fraud call centre jointly operated by the Ontario Provincial Police and the Royal Canadian Mounted Police and plays a key role in educating the public about fraudulent telemarketing pitches. Consumers who want information or advice on how to protect themselves in the marketplace can call the ministry's Consumer Services Bureau at 416-326-8800 or 1-800-889-9768 or visit the ministry's website at www.mgs.gov.on.ca. Disponible en français www.mgs.gov.on.ca Backgrounder ------------------------------------------------------------------------- March 1, 2006 TOP 10 2005 CONSUMER COMPLAINTS AND INQUIRIES The ministry's Consumer Services Bureau provides information and advice to consumers and mediates complaints between consumers and businesses. The ministry receives more than 75,000 complaints and inquiries by mail and telephone each year. Here are the top 10 complaints and inquiries received by the ministry in 2005. Ranking Goods/Services 1 Collection Agencies 2 Home Renovations 3 Motor Vehicle Repairs 4 Motor Vehicle Purchases (new/used) 5 Home Furnishings 6 Personal Items (e.g., clothing, cosmetics, jewellery) 7 Credit Reporting 8 Health and Fitness 9 Timeshare and Vacation Clubs 10 Cell Phones Collection Agencies ------------------- The Collection Agencies Act governs collection agencies in Ontario. A collection agency must inform the consumer if it plans to take legal action to collect a debt. Collection agencies are not allowed to make harassing phone calls and cannot continue to demand payment from a person who claims not to owe money, unless the agency first takes all reasonable steps to ensure the person, in fact, owes money. Home Renovations ---------------- If such a contract is negotiated or concluded at the consumer's home, the consumer can cancel the contract within 10 days of receiving a written copy of it. The final costs cannot be more than 10 per cent above the original written estimate set out in the agreement with the consumer. Motor Vehicle Repairs --------------------- If there is a fee associated with providing an estimate, this must be disclosed in advance. Final charges for repair work cannot be more than 10 per cent over the original estimate. Repair shops cannot charge for work without giving the consumer an estimate. The only exception is where an estimate is offered, the consumer declines the estimate and authorizes a maximum amount and the final cost does not exceed that amount. Motor Vehicle Purchases ----------------------- Enhanced consumer protection when buying motor vehicles will be covered in the Motor Vehicle Dealers Act, 2002, expected to come into force in 2006. Home Furnishings ---------------- Under the Consumer Protection Act, if the promised date of delivery is missed by more than 30 days, consumers can cancel the agreement. Personal Items -------------- Consumers are protected against unfair practices, such as deceptive promotion and sales pitches. If an unfair practice has occurred, consumers have a year to rescind the agreement. Credit Reporting ---------------- It is illegal for a credit repairer to claim that they can bring any material improvement to a consumer's credit file, before actually examining the consumer's report and reasonably concluding that any material improvement can be made. Consumers have 10 days to cancel agreements for credit repair. Health and Fitness ------------------ A personal development services agreement is limited to a one-year term. The business must provide consumers the option to pay monthly installments. A consumer can cancel the agreement within 10 days after the later of (a) receiving a written copy of the agreement and (b) the day all services are available. Timeshare and Vacation Clubs ---------------------------- A consumer can cancel the agreement, without reason, within 10 days after receiving a written copy of the agreement. If the consumer cancels the agreement, the business must provide a full refund within 15 days. Cell Phones ----------- Contracts must disclose required information in a prominent, clear and comprehensible manner. If there is a dispute over unclear language in a consumer agreement provided by the business, the law requires that it be interpreted in favour of the consumer. Payday Lending -------------- The new act establishes clear disclosure requirements for payday lending as part of the rules on credit agreements. The ministry continues to work with the federal government on solutions to the high fees and interest rates charged by payday lenders. The new act requires clear disclosure of costs of credit. Complaints and Advice --------------------- Consumers can call the Consumer Services Bureau for advice Monday to Friday from 8:30 a.m. to 5 p.m. at 416-326-8800 in Toronto or toll free at 1-800-889-9768. The TTY is 416-325-3408 or 1-800-268-7095. Information and advice about consumer issues are available on the ministry's website at www.mgs.gov.on.ca, where an online complaint form is available and may be submitted electronically. For more information, contact: Ministry of Government Services 250 Yonge St., 32nd Floor Toronto ON M5B 2N5 In Toronto: 416-326-8800 Toll-free: 1-800-889-9768 TTY: 416-325-3408 or 1-800-268-7095 Fax: 416-326-8665 Disponible en français www.mgs.gov.on.ca Backgrounder ------------------------------------------------------------------------- March 1, 2006 THE CONSUMER PROTECTION ACT Ontario's Consumer Protection Act, 2002, provides consumers and businesses in Ontario with new rights, responsibilities and remedies for a fair, safe and informed marketplace. Brought into force on July 30, 2005, the act makes Ontario a world leader in consumer protection. The act was developed in consultation with more than 90 business and consumer groups. The act consolidates six former consumer protection laws: the Business Practices Act, the Consumer Protection Act, the Consumer Protection Bureau Act, the Loan Brokers Act, the Motor Vehicle Repair Act and the Prepaid Services Act. Ontario's consumer legislation is based on three guiding principles: fairness for consumers, responsiveness to business and consumers and flexibility to adapt to future needs. - Fairness for consumers - the law sets out disclosure requirements that ensure both parties understand a transaction. For example, a consumer has 10 days in which to cancel a direct agreement (i.e., door-to-door sale). Also, final costs cannot be more than 10 per cent of the original agreed estimate set out in the consumer agreement. - Responsive to both business and consumers - the law is practical so that businesses can follow it, consumers can use it and government can enforce it. For example, if a consumer is charged for goods or services they did not request (negative-option billing), they can demand a full refund. - Flexibility to adapt to future needs - the law allows the government to respond to marketplace developments as problems emerge. Strengthening Enforcement and Fines - Stronger enforcement remedies to curb dishonest activity and protect the reputation of Ontario businesses - Maximum sentence of two years less a day for individuals - Maximum fines are doubled to $50,000 for individuals and more than doubled to $250,000 for corporations - Prosecutions in 2005 resulted in a total of 45 months in jail terms, 675 months of probation, $600,000 in fines and more than $300,000 in restitution orders. - The new legislation covers short-term leases of goods, Internet agreements and agreements in other areas that were inadequately covered in the old legislation. Disponible en français www.mgs.gov.on.caFor further information: Ciaran Ganley, Minister's Office, (416) 212-3547; Gordon Smith, Communications Branch, Ministry of Government Services, (416) 325-3884