PART B: Consumer Protection Act

1.What type of unfair practice is this:

A)A payday loan company enters into a loan agreement with a recent immigrant with a low-income part time job who does not speak much English, which allows him to borrow money at an interest rate that is five times higher than the market rate.

B)An air conditioner company tells a homeowner that they need to replace their existing air conditioner immediately, because the old unit is so damaged that it is a fire hazard.The homeowner buys the new air conditioner, but in reality, the old one only needed a minor repair.

2.What remedy is available to the homeowner in 1 B)?

Consumer Protection Act 2002 - only applies to consumer transactions and excludes professional services and real estate- reinforces the Sale of Goods Act as you can't contract out of those implied terms e.g. goods must be merchantable -

- estimates must be within 10% of the actual price charged, if greater, than the estimated price app lies

- negative-option marketing is illegal (they charge you unless you say not to, this is illegal)

-Unfair Practices - 3 Types:

-S. 14 False, Misleading or Deceptive Representations: e.g. lies about performance, quality, new/used- p. 185 Schnarr v. Blue Mountain - a waiver did not work in case of breach of implied warrantythat services be of a reasonably acceptable quality

-S. 15 - Unconscionable Transactions - a deal that would shock the moral sense of the average person as the deal is so grossly unfair - e.g. one side is so ignorant, disabled, illiterate or vulnerable that they are horribly taken advantage of by a much stronger party -the contract can be unenforceable as it is unconscionable - p. 187 DeMaeseneer - excessive interest rate(56%) on loan to nanny -insurance co. has injured person settle for very low amount (Burkhardt took $4,500 but court says it is unconscionable and sets it at $53,000)

- s. 16 seller can't hold onto consumer's goods to force buyer to renegotiate a new deal at a higher price

-s. 18 give consumers the right to rescind the contract within 1 year of it being made if there is an unfair practice andthey can sue for damages including punitive damages

- if guilty of unfair practices, the govn. can fine the person that committed it $50,000 and/or < 2 years jail and co. $250,000 fine

Specific Consumer Transactions in the Act:

- specific disclosure rules on contracts made on the internet, phone, catalogue or to be completed in the future and if disclosure is not made they often can be cancelled

-3-Ch. 6

Cooling Off Periods - if a contract is for a personal development service (e.g. fitness club, martial arts lessons, dance lessons, modelling, dieting) or done by a door-to-door sale or a brand new condominium just built or a time share condo there is a 10 day cooling off period and you can get out of deal for any reason even if you paid and used it so long as give written notice within 10 days

-20 day cooling off period for gas water heaters, 2 day cooling off period for a pay day loan

- Credit Granting and Reporting Agencies - cos. can only check your credit if you agree and must tell you why they deny credit and you can force credit agency to correct any errors

Collection Agencies - law tries to limit their bad behaviour - can't call on Sun. or statutory holidays and only between 7am and 9pm and no lies or threats or harassment or personal visits

Other Legislation: there are many other laws that protect consumer health and safety such as:

Food and Drug Act - regulates the safety of food and drugs we consume such as packaging, sanitary conditions, proper labelling of ingredients and calories, dangerous ingredients, truthful claims, licensing of new drugs - CFIA Canadian Food Inspection Agency oversees this area doing inspections on food andfor Health Canada - (Maple Leaf Foods listeriosis bacteria killed 22 and 5,000 sick in 2008)- new Safe Food for Canadians Act replaces 4 laws andhas up to 5 years jail and unlimited fines

Hazardous Products Act - label requirements for toxic, poisonous and flammable goods

Canada Consumer Product Safety Act- regulates many goods such as toys, household products & sporting goods for safety concerns

Consumer Packaging and Labelling Act - regulates what information must be on product labels (e.g. ingredients, calories) and often the size of containers cos. can use