The provincial government is currently undertaking the first review of the Consumer Protection Act (CPA) in 15 years. Having answered more than 8,500 consumer calls on the Free Legal Advice Hotline since 2017, PBO believes amendments cannot come soon enough. Most of our suggestions to the government have focussed on the issue we see more often than any other on our consumer line: long-term leases for home equipment that consumers did not want or need and cannot afford, often sold door-to-door. While the Ontario government restricted the door-to-door sale of many products starting March 2018, too many unscrupulous vendors remain undeterred.
Our average door-to-door victim is retired, does not have a strong mastery of English, or already struggles with debt. Sellers make it into the home on various pretexts: there is a contest, the new equipment will be free after a rebate, the company ordered an inspection, or the government sent them. They are even known to approach homeowners already knowing their full name, their marital status and the name of their energy provider.
The lucky ones find us after a few months of unusual charges on their energy bills. They call because they cannot convince the company to cancel the account or even send them the contract. The less fortunate turn to PBO when they discover that the “free” product in their basement could prevent the sale or refinancing of their home. Some contact PBO only after they were forced to pay out amounts well in excess of the value of equipment in dispute to close time-sensitive transactions.
IMPOSING AND ENFORCING CLEAR DISCLOSURE
As the saying goes, an ounce of prevention is worth a pound of cure. Hotline callers repeatedly tell us they would not have signed their agreement had they understood that they would repay the value of the equipment multiple times over the life of the contract. While the CPA requires disclosure of the full cost of the contract and the retail value of the equipment for door-to-door sales, companies routinely omit this information or bury it in the fine print. PBO would like to see mandatory disclosure of the full contract cost and equipment value in plain language and large type on the front page of every agreement, and – because any violation would be apparent on the face of the contract – robust enforcement actions aimed at suppliers who flout this requirement.
REMOVING THE UNFAIR LEVERAGE OF “LIENS”
Suppliers have an unfair advantage over homeowners when it comes to negotiating disputed contract cancellations. That advantage stems from their ability to register a Notice of Security Interest (NOSI) on title to the consumer’s property whenever equipment is installed in the home. This imposes an enormous burden on consumers, since mortgage lenders and purchasers normally require NOSIs to be removed from title before completing a transaction. PBO often receives frantic calls from homeowners who have less than a week to clear a $10,000 NOSI they never knew existed or risk a failed refinancing or a lawsuit stemming from an aborted closing.
Right now, consumers need to pursue justice in the Superior Court to force the removal of a NOSI, a daunting and time-consuming process that can be dragged out by vendors. If a pending transaction makes this impossible, they’re forced to pay the supplier up front and seek redress in the courts later. Consumers should be able to bypass uncooperative vendors and the courts to remove NOSIs if they can demonstrate that contracts for home equipment are invalid on their face. In cases with disputed facts, there should be a streamlined Small Claims Court process that puts the parties on equal footing, and that includes an option for the consumer to obtain the immediate removal of the NOSI by paying the money into court – rather than to the supplier – pending settlement or adjudication.
HELPING CONSUMERS PURSUE JUSTICE
While prevention is key, Ontarians will always need access to the cure: individualized assistance in enforcing their rights. As business and technology continue to evolve, bad actors will find new ways to muddy the waters. Too many Ontarians do not have the knowledge and self-efficacy to advocate for themselves. PBO answers calls from consumers who experience vulnerability along several dimensions. 51% are in households that earn less than $2,250/month, and 35% are on social assistance or earn less than $1,500 month. 44% of clients calling about door-to-door sales contracts are seniors. For them, unnecessary consumer debt can force choices between food and medicine on the one hand, and monthly fees on the other.
The value of easily accessible legal assistance is clear and measurable. PBO provides each caller tailored legal information and advice about their options. Using our document generation software, we have drafted hundreds of demand and rescission letters. Moreover, PBO has been able to harness the might of its volunteers in Small Claims Court – at settlement conferences and at trial – and before the Superior Court. We have secured contract cancellations, damage awards, and even refunds of monies paid out to discharge NOSIs. Between court awards, honoured warranties and costs avoided through cancelled contracts, PBO has been able to achieve millions of dollars in direct economic benefits for consumers.
But so much more can be done on the strength of a CPA that creates meaningful and enforceable rights for Ontarians. Any changes that make it harder for bad actors to act with impunity will be warmly welcomed.