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The Consumer Protection Act, 2002, and its general regulation came into force on July 30, 2005. The new legislation is a major overhaul of the previous Act resulting in significant new rights for consumers and heightened compliance issues for businesses. The new Act extends protection to Ontario consumers with respect to various consumer agreements including those for time share units, personal development services (which include health and fitness service agreements and talent contracts) and agreements made over the internet. The most common consumer protections are new disclosure obligations on suppliers, new cooling-off periods and new cancellation procedures.

For example, if a consumer enters into a time share agreement or joins a discount travel club, he or she is entitled to receive a written copy of the agreement and may, without any reason, cancel the agreement within 10 days of receiving it.As e-commerce is becoming commonplace, the Act attempts to better protect consumers entering into agreements made over the internet. A supplier must now give a consumer an express opportunity to accept or decline the agreement, and the supplier must provide the consumer with a written copy of the agreement within 15 days from the date of execution. This copy can be delivered electronically, but must be in a readable, storable version. Many suppliers carrying on business in Ontario will need to change their e-commerce procedures in order to comply with the new Act.The Act also regulates a variety of miscellaneous contracts where the possibility of consumers being taken advantage of is high. These include future performance agreements, where the delivery, performance or payment in full is not made at the time the parties enter the agreement, as well as direct agreements that are negotiated or concluded in person at a place other than at the supplier’s place of business (for example at one’s front door) and remote agreements that are entered into when the consumer and supplier are not present together. Credit or loan agreements and credit repair agreements are now also regulated.Despite the sweeping nature of the amendments, services that are regulated by other legislation with built-in consumer protection are excluded. For example, the supply of accommodation (other than time shares), lotteries and goods sold at a public auction are specifically exempt.In light of the severe penalties for failure to comply with the Act (including fines of up to $250,000.00 for corporations), we recommend that businesses closely review their consumer transaction procedures to ensure that they comply with the new Act.

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