Bill 72, An Act to protect consumers against abusive commercial practices and to offer better transparency with respect to prices and credit, was recently tabled by the Québec government. This legislation includes amendments to the Québec Consumer Protection Act that will impose new requirements on businesses with respect to consumer credit contracts, contracts with door-to-door salespeople, banking fraud, long-term lease of goods contracts, food pricing displays and point-of-sale tipping options.
Please note that this post provides only a high-level overview of the more significant changes proposed in Bill 72.
Consumer Credit Agreements: New Credit Limit Rules
Bill 72 proposes important changes to consumer credit agreements, including requiring:
- that all applications for open credit state the credit limit desired by the consumer; and
- that consumers expressly consent to any increases in the credit rate or credit charges.
Restrictions Affecting Travelling Salespeople
Bill 72 prohibits “itinerant merchants” (ex. door-to-door salespeople, or vendors at pop-up sales kiosks) from entering into certain contracts with consumers, including:
- credit contracts,
- long-term lease of goods contracts, and
- contracts concerning, even on an incidental basis,
- heating or air-conditioning appliances,
- decontamination services; or
- insulation services.
The Bill also prohibits itinerant merchants from supplying a service provided for in a consumer contract, including the installation of goods, before the expiry of the ten-day cancellation period for such contracts.
Lastly, the Bill provides that a contract entered into by the consumer under or in relation to a contract made with an itinerant merchant forms part of the whole contract and is cancelled of right if the contract made with the itinerant merchant is cancelled.
Improper Debits from Consumer Deposit Accounts: Expanded Merchant Liability
Bill 72 requires merchants with whom a consumer holds a demand deposit account to refund any sum debited from that account without the consumer’s authorization.
Merchants will also be required to refund any sum debited with the authorization of the consumer, where the latter is a victim of fraud, if the merchant debited that sum without taking the necessary precautions to prevent it despite strong indications raising a suspicion of fraud.
The consumer will nonetheless be held liable for the lost sums if the merchant establishes that the consumer committed a gross fault as regards the protection of her personal identification number.
New Requirements for Long-term Lease of Goods Contracts
Bill 72 requires long-term lease of goods contracts to state the following:
- that the contract is a leasing contract;
- the leasing period;
- the description and retail value of the leased goods and, if applicable, the payment on account;
- the value of any goods given in exchange and the balance of any debt on those goods;
- whether or not the contract includes a purchase option or is a contract of lease with a guaranteed residual value;
- the nature and amount of any payment or any deposit made by the consumer;
- the consumer’s net obligation, instalment obligation and maximum obligation;
- the amount and due date of each instalment payment and the number of instalments
- the nature of any optional contracts, the charges for such contracts or how they are determined, and a statement that the consumer may resiliate such contracts;
- the residual value of the leased goods, in dollars and cents;
- the conditions on which the contract may be resiliated by either party, including the amount or the manner of calculating the amount that the consumer is required to pay on resiliation;
- the implied credit charges applicable to the entire leasing period stated in dollars and cents and the date on which credit charges begin to accrue, or how that date is determined;
- the implied credit rate relating to the contract;
- the interest rate applicable to late instalments;
- the existence and the subject matter of any security given to guarantee the performance of the consumer’s obligations;
- if entering into an insurance contract is a condition for entering into the contract, that the consumer has the right to use an existing insurance policy or to purchase insurance from the insurer and insurance representative of the consumer’s choice, subject to the merchant’s right to disapprove, on reasonable grounds, the insurance choice; and
- the date of delivery of the goods.
Additionally, a contract that includes a conventional option to purchase will be required to indicate clearly and legibly in separate and successive clauses:
- the time at which the option to purchase may be exercised, specifying whether it may be during the contract or at the end of the leasing period only;
- the total amount the consumer must pay to acquire the goods or the manner of calculating that amount, depending on whether the option to purchase is exercised at the end of the leasing period or during the contract, including any fees to exercise the option; and
- any other conditions of exercising the option.
Food Product Price Displays
Bill 72 introduces new provisions concerning the sale of food products that will require grocers and other merchants to ensure that food product prices are displayed clearly and transparently, including by:
- indicating whether the item is taxable or not;
- indicating the regular price next to any discounted prices, including where the discount is only offered to members of a loyalty program;
- in the case of food products offered as a set, indicating next to the price any food products belonging to the set that can be purchased separately and, if applicable, their prices; and
- where the price of an item is based on a unit of measurement, indicating the metric unit best adapted to the nature of the goods and indicating the same unit of measurement for all goods of the same nature.
Tipping on Point-of-Sale Devices
Bill 72 also responds to recent consumer complaints about tipping practices on many point-of-sale devices by introducing the following new requirements:
- suggested tip amounts based on a percentage of the cost of the goods or service must be calculated excluding any applicable sales taxes;
- the consumer must be able to determine the amount of the tip they are choosing to give; and
- all elements displayed on the device must be emphasized equally prominently.
Next Steps
The Bill has only passed the first reading stage and remains subject to change. We will continue to monitor the Bill for important developments as makes its way through the legislative process.
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