[Ecommerce] Ontario consumer protection legislation

[James Love]

http://www.canada.com/ottawa/news/story.asp?id={D65E1982-E4FB-42F7-9209-ABAFB56B4042}

Ontario targets scam artists
Sweeping changes to bring consumer protection into the Internet age. 'We 
need to keep the laws current and up-to-date'

April Lindgren
The Ottawa Citizen

Thursday, September 26, 2002
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TORONTO -- Consumers will be better protected against sleazy home 
renovators, shady car repair shops and Internet scam artists under new 
legislation the Ontario government is expected to introduce today.

"When consumer protection came into being, the marketplace was based 
primarily on goods and nobody had even imagined the Internet," said a 
government source. "Today, services make up half of day-to-day business and 
we need to keep the laws current and up-to-date."

In what is being touted as the most comprehensive reform of consumer laws in 
provincial history, six existing pieces of legislation will be combined and 
updated under a new consumer protection act.

"The changes are all things we would welcome," said Theresa Courneyea, 
president of the Ontario chapter of the Consumers Association of Canada.

Under the new legislation, consumers will have the right to cancel contracts 
if goods and services aren't provided within 30 days of the date specified 
in the deal. Other new protections in the act include:

- A provision that says home renovators and movers must charge within 10 per 
cent of their estimates, something that already applies to auto repair shops.

If the renovator proposes a new price before work begins, the consumer can 
walk away from the deal. If unexpected problems in the course of the job 
push up costs, both the homeowner and contractor must agree to a new estimate.

- A ban on negative option billing for services. Negative option billing has 
already been outlawed for goods so that consumers who join a book club, for 
instance, are not obliged to pay for books that just keep on coming though 
they were never specifically ordered. The new law governing services is 
designed to protect consumers in cases, for example, where Internet service 
providers continue to withdraw monthly payments from bank accounts once 
their service contract expires. It would also make it illegal for cable 
television channels to automatically bill customers for extra channels once 
a trial period ends.

- A 10-day cooling off period for timeshare and vacation club buyers so 
consumers can reconsider their decisions. The goal is to help those caught 
off guard by high-pressure sales tactics and to make the rules consistent 
with those already in place to protect against high-pressure door-to-door sales.

- Require companies selling goods over the Internet to provide their 
place-of-business addresses and to issue some form of confirmation of deals 
once they are completed. Contracts agreed to over the Internet would also be 
subject to the new 30-day delivery of goods and services requirement.

Common Internet scams in Ontario include charging up-front fees for "fixing" 
bad credit ratings, offering worthless and unnecessary credit card 
insurance, promoting personal loans that never arrive, offering 
get-rich-schemes that only enrich the people promoting the scam and 
purchasing goods through online auctions that never arrive.

The Internet provisions "will offer better protection than what we have 
now," said University of Ottawa law professor Michael Geist, who has written 
a paper on consumer protection in electronic commerce for the Ontario 
Consumer Ministry.

"Consumers often don't know what (Internet) site they can trust. ... Many 
transactions are unregulated and consumers don't know where the seller is 
located and having no receipt after the transaction is completed makes it 
difficult to get recourse."

Mr. Geist said the new Ontario rules put the province in about the middle of 
the pack when it comes to consumer Internet protection. Some jurisdictions, 
he noted, have passed laws that require credit card companies to "go to bat" 
for consumers when Internet transactions go badly wrong.

The new legislation will also give the Consumer Ministry two years -- up 
from six months -- to investigate complaints and increase its power to 
freeze assets and issue compliance orders. Fines for everything from auto 
repair to Internet scams will also increase, doubling to $50,000 for 
individuals and rising to $250,000 from $100,000 for companies.

The ministry receives more than 40,000 complaints a year from consumers 
about service problems, fraud and scams.



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James Love, Consumer Project on Technology
http://www.cptech.org, mailto:love@cptech.org
voice: 1.202.387.8030; mobile 1.202.361.3040