On September 12, 2024, the Quebec Minister of Justice introduced Bill 72, An Act to protect consumers against abusive commercial practices and to offer better transparency with respect to prices and credit, which amends the Consumer Protection Act (CPA) with an aim to further protect consumers and provide them with clearer information.
Bill 72 made headlines primarily for its new requirements regarding tipping and the prices posted in grocery stores. But its scope is much broader, affecting multiple aspects of merchants’ obligations upon entering into a contract and the rules governing credit contracts.
Its main amendments to the CPA, which may take effect as soon as December 2024, are summarized below.
Contract duplicates in paper form
For all contracts that must be evidenced in writing under the CPA,1 Bill 72 replaces section 32 CPA to require merchants to provide a duplicate of the contract in paper form.
However, new section 32 CPA provides that any document other than the contract that may be given to the consumer may be sent to a technological address if expressly authorized to do so by the latter.
Amendments to contracts with itinerant merchants
The Bill makes a host of amendments to the provisions that govern contracts entered into with itinerant merchants.
1. New requirements as to form
Bill 72 sets out additions to the content of contracts entered into with itinerant merchants, particularly to indicate the total amount the consumer will have to pay under a fixed-term contract on a monthly basis, even if the payments are calculated on another basis.
Contracts with itinerant merchants must also indicate the terms and conditions of payment.2
2. Period before the supply of services
The CPA already provides that consumers may cancel contracts with itinerant merchants within 10 days of receiving a duplicate of the contract, or within one year in certain circumstances.
Bill 72 incorporates a new provision that states that the itinerant merchant may not supply a service or proceed with the installation of goods before the expiry of the 10-day cancellation period (new section 60.1 CPA).
3. Prohibition from entering into certain contracts
Bill 72 sets out certain types of contracts that consumers will be prohibited from entering into with itinerant merchants, namely:
- Heating or air-conditioning appliances (including air conditioners, heat pumps, furnaces or geothermal systems);
- Decontamination services;
- Insulation services;
- Credit contracts;
- Long-term contracts of lease.
Additionally, Bill 72 provides that a regulation may also determine other types of contracts that may not be entered into with itinerant merchants.
However, it is worth noting that the Regulation respecting the application of the Consumer Protection Act will set out special circumstances in which itinerant merchants may enter into credit contracts or long-term contracts of lease, namely the types of contracts already included in an exception from the provisions governing contracts entered into by itinerant merchants.
4. Contract cancellation
Upon cancellation of a contract entered into with an itinerant merchant, Bill 72 states that the parties must refund, remit or restore what they received from one another, which now includes refunding all sums paid by the consumer to a third-party merchant.
Bill 72 also provides that any contract entered into by the consumer with a “third-party merchant” that results from a representation or other action by the itinerant merchant forms part of the whole contract and may be cancelled as of right if the contract made with the itinerant merchant is cancelled.
Consumers may also exercise any recourse based on non-performance against itinerant merchants, even with respect to contracts made with third-party merchants.
New limited liability in case of fraud or of unauthorized use of an account
Bill 72 introduces new provisions visibly intended for financial institutions providing that any merchant with whom a consumer holds a deposit account will have to refund any sum debited without the consumer’s authorization.
Such a merchant will also have to refund any sum debited from the consumer’s account resulting from fraud if the merchant did so without taking the necessary precautions to prevent the fraud, despite strong indications raising a suspicion of fraud.
Such refunds will have to be made within five working days after the consumer’s request to that effect. However, before being notified of the situation, the merchant will be required to refund only sums that exceed $50.
Nevertheless, the merchant will not be required to refund such sums if it is established that the consumer committed a gross fault as regards the protection of their personal identification number.
While not stipulated by Bill 72, it is expected that a gross fault as regards the sharing of other identifiers and access codes would also preclude a refund by the merchant.
Amendments regarding credit contracts
Bill 72 also makes a host of amendments to the provisions governing various types of credit contracts.
1. Amendments regarding credit charges
Bill 72 provides that charges related to security will now have to be included as a credit charge component, which means they will have to be included in the credit rate applicable to credit contracts.
Conversely, Bill 72 removes from the credit charge components the fees for registration in or access to a public register of rights, which no longer need to be included in computing the credit rate (and may incidentally be charged independently).
2. Computing the credit rate under open credit contracts
In addition to the amendment regarding fees for registration in or access to a public register of rights, Bill 72 amends section 72 CPA and the method of calculating the current credit rate by providing that the following do not have to be taken into account:
- The membership or renewal fees payable under a credit card contract, provided that those fees are payable only once a year;
- The value of the rebate or of the discount to which the consumer is entitled if they pay cash;
- Replacement fees for a lost or stolen credit card.
3. Other charges that may be claimed from consumers
In addition to credit charges, Bill 72 amends section 92 CPA to provide that merchants may claim the following charges from consumers:
- Only the charges paid following a financial institution’s refusal to accept a cheque or other payment instrument given by the consumer;
- Only the charges paid following the impossibility of completion of a transfer of funds agreed on by the consumer and the merchant.
4. Amendment regarding credit contracts
Bill 72 also amends section 98 CPA in respect of credit contracts to stipulate that should the parties to a credit contract wish to amend certain provisions of the contract, the amendment must be evidenced in a new contract or in an addendum to the original contract.
Bill 72 further provides that an amendment that has the effect of increasing the credit rate or credit charges may be made only at the consumer’s request.
5. Additions to credit card application forms
In addition to the requirements already set forth in the CPA, credit card application forms or the accompanying documents must now contain the minimum periodic payment or the method of calculating that payment for each period.
Moreover, any application relating to an open credit contract will have to state the credit limit desired by the consumer. The merchant will not be able to grant the consumer a higher credit limit.
6. Allocation of payments if more than one debt exists
Should a consumer have multiple debts with the same debtor, Bill 72 provides that the merchant will be required to allocate any payment first to the debt with the highest credit rate, then to other debts in decreasing order of credit rate.
7. Credit over-limit notices
Following the addition of section 128.1 CPA in earlier amendments, Bill 72 amends this provision to specify that the merchant must use the consumer’s technological address to send the notice before the limit may be exceeded, while stating the amount that remains available for credit.
8. Long-term contracts of lease
Bill 72 sets out numerous amendments to the contractual framework for credit granting and long-term vehicle leasing. It amends both the form of such contracts and the substantial obligations, particularly as regards determining the value of the goods, the value of the payment on account or the goods given as a trade-in, determining the residual value, exercising a conventional option to purchase and determining the credit charges and rates under such contracts.
9. Permit required to offer to enter into open credit contracts or high-cost long-term contracts of lease
Bill 72 amends section 321 CPA to provide that merchants must hold a permit issued by the Office de la protection du consommateur before entering into open credit contracts and high-cost long-term contracts of lease.
10. Advertisements concerning credit for the long-term lease of goods
In addition to the CPA provisions already in force, Bill 72 incorporates new requirements with respect to advertisements concerning credit by prohibiting any and all persons from referring to an implied credit rate without disclosing that rate, or disclosing such a rate that is not calculated in accordance with the CPA.
11. Increased powers of the courts
Through Bill 72, the CPA will grant new powers to courts in connection with disputes arising from credit contracts.
On an application by the consumer, the court may now suspend the repayment of the balance owed by the consumer under a credit contract (other than as part of an application in a class action).
In addition, the court may now order a service contract to be terminated on the consumer’s application if the consumer is unable to fulfil their obligations and remedy the fact that they are in default within 30 days. In such a case, the cancellation of the contract will extinguish the consumer’s contractual obligations.
Posted prices and pricing accuracy
For the sale of food products intended for human consumption, Bill 72 adds a new provision to stipulate that the merchant must indicate, near the price of the product in question, whether it is taxable or not.
In addition, the unit price, the price per unit of measurement, regular price and “non-member” price must be visible and clear at all times, and the regular price of the goods must be clearly indicated next to any reduced price.
The bill also amends the Policy on accurate pricing for merchants who use optical scanner technology. It increases from $10 to $15 the maximum value of any good whose price is incorrectly posted and that must therefore be given free of charge to the consumer, or the value of the discount to be granted if the good’s value exceeds said maximum value.
Tips
Lastly, and as the measure that has probably garnered the most public attention, Bill 72 provides that merchants may only propose tips that are calculated on the base price of the product or service in question, before applicable taxes, and that the consumer must be able to determine the amount of the tip, if any.
CONCLUSION
We currently do not know when Bill 72 and its amendments to the CPA and the Regulation respecting the application of the Consumer Protection Act might take effect, but there is reason to believe it could be quite soon. The Minister of Justice expects it to be assented to and effective by December 2024. Some provisions may be phased in to allow merchants to adjust to their new obligations.
These measures will certainly have an impact on consumer law and require affected merchants to change their practices in various ways.
1 By virtue of section 23 CPA, contracts with itinerant merchants, credit contracts, contracts which include an option to purchase, contracts of lease with guaranteed residual value, contracts of sale for automobiles, contracts relating to timeshare accommodation rights, contracts for instruction, training or assistance, contracts with physical fitness studios and any accessory contract and contracts involving sequential performance for a service provided at a distance.
2 Subparas. (g) and (g.1) of the first para. of s. 58 CPA.