Difference between revisions of "Consumer Protection from Deceptive and Unconscionable Acts (11:IV)"
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=== 1. Damages Recoverable by Consumers === | === 1. Damages Recoverable by Consumers === | ||
Under s 171 of the ''BPCPA'', a consumer may commence a civil action seeking damages for loss due to a deceptive or unconscionable act or | Under s 171 of the ''BPCPA'', a consumer may commence a civil action seeking damages for loss due to a deceptive or unconscionable act or practice. As with other civil actions, punitive damages or restitution may also be available. Small Claims Court may be used if the claim does not exceed $35,000. | ||
=== 2. Transaction Unenforceable by Supplier === | === 2. Transaction Unenforceable by Supplier === | ||
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=== 3. Injunction, Declaration and Class Action === | === 3. Injunction, Declaration and Class Action === | ||
Under s 172, any person, whether or not that person has a special interest in or is affected by a consumer transaction, may bring an action | Under s 172, any person, whether or not that person has a special interest in or is affected by a consumer transaction, may bring an action seeking declaratory or injunctive relief. This involves seeking to have the court declare an act to be deceptive or unconscionable and to have the court grant an injunction restraining the supplier from engaging further in such acts. Under s 172(2) the Director may bring an action on behalf of consumers generally or a designated class of consumers. | ||
The ''BPCPA'' stipulates that while the Provincial Court has jurisdiction for civil actions under s 171, actions under s 172 must be brought in Supreme Court. | The ''BPCPA'' stipulates that while the Provincial Court has jurisdiction for civil actions under s 171, actions under s 172 must be brought in Supreme Court. | ||
For an example of a class action suit dealing with the ''BPCPA'', see ''Dahl v Royal Bank of Canada'', 2006 BCCA 369. Credit card debtors brought a class action suit against the Royal Bank of Canada, the Canadian Imperial Bank of Commerce, and the Bank of Montreal. In the plaintiffs’ Statement of Claim, they asserted that the defendants failed to disclose the true cost of borrowing by providing the transaction | For an example of a class action suit dealing with the ''BPCPA'', see ''Dahl v Royal Bank of Canada'', 2006 BCCA 369. Credit card debtors brought a class action suit against the Royal Bank of Canada, the Canadian Imperial Bank of Commerce, and the Bank of Montreal. In the plaintiffs’ Statement of Claim, they asserted that the defendants failed to disclose the true cost of borrowing by providing the transaction dates for cash advances on their monthly statements rather than the posting dates (the dates the money was actually advanced), allowing more interest to be charged; the court, however, ultimately rejected this argument. | ||
In any action for permanent injunction under s 172(1)(b), the court may restore to any interested person any property or money acquired by deception or unconscionable acts or practices by the supplier (s 172(3)(a)), and may require the supplier to advertise to the public in a way that will assure prompt and reasonable communication to consumers (s 172(3)(c)). | In any action for permanent injunction under s 172(1)(b), the court may restore to any interested person any property or money acquired by deception or unconscionable acts or practices by the supplier (s 172(3)(a)), and may require the supplier to advertise to the public in a way that will assure prompt and reasonable communication to consumers (s 172(3)(c)). | ||
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=== 4. Supplier Found Guilty of an Offence === | === 4. Supplier Found Guilty of an Offence === | ||
Under the ''BPCPA'' Section 189 creates a list of offences punishable by both fines and imprisonment, which may be sought by the Crown against | Under the ''BPCPA'' Section 189 creates a list of offences punishable by both fines and imprisonment, which may be sought by the Crown against a party found in breach of the BPCPA. Under s 190, an individual who commits an offence is liable to a fine of not more than $10,000, or to imprisonment for not more than 12 months, or to both. | ||
== D. Limitation Period == | == D. Limitation Period == | ||
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Under s 193, no prosecution under the ''BPCPA'' may be started more than two years after the date on which the subject matter of the proceeding arose. | Under s 193, no prosecution under the ''BPCPA'' may be started more than two years after the date on which the subject matter of the proceeding arose. | ||
Note that s 193 does not apply to civil proceedings. The limitations period in civil proceedings will depend on the nature of the claim and the time period allowed by the ''Limitation Act'' | Note that s 193 does not apply to civil proceedings. The limitations period in civil proceedings will depend on the nature of the claim and the time period allowed by the ''Limitation Act''; see [[Consumer Transaction Analysis (11:II)#E. Determine the Limitation Period for Making a Claim | Section II.E: Determine the Limitation Period for Making a Claim]]. | ||
== E. Powers of the Director == | == E. Powers of the Director == | ||
Consumer Protection BC is responsible for the administration and enforcement of the ''BPCPA''. Part 10 of the BPCPA contains all inspecting | Consumer Protection BC is responsible for the administration and enforcement of the ''BPCPA''. Part 10 of the BPCPA contains all inspecting and enforcement powers of Consumer Protection BC, its inspectors, and the Director. The Director has the power to: | ||
*a) use the same powers that the Supreme Court has during trials of civil action for the purposes of an inspection, to summon and enforce the attendance of witnesses, compel witnesses to give evidence under oath or in any other manner, and to produce records; | *a) use the same powers that the Supreme Court has during trials of civil action for the purposes of an inspection, to summon and enforce the attendance of witnesses, compel witnesses to give evidence under oath or in any other manner, and to produce records; | ||
*b) institute proceedings or assume the conduct of proceedings on behalf of a consumer; | *b) institute proceedings or assume the conduct of proceedings on behalf of a consumer; | ||
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*d) refrain from bringing an action against a supplier and accept instead a written undertaking under s 154 of the ''BPCPA''. This undertaking usually takes the form of a formal agreement between the Director and supplier and may involve consumer redress. It is probably one of the most effective remedies under the ''BPCPA'' because it avoids both the time and expense of court proceedings; | *d) refrain from bringing an action against a supplier and accept instead a written undertaking under s 154 of the ''BPCPA''. This undertaking usually takes the form of a formal agreement between the Director and supplier and may involve consumer redress. It is probably one of the most effective remedies under the ''BPCPA'' because it avoids both the time and expense of court proceedings; | ||
*e) issue a compliance order under s 155 of the ''BPCPA'' where compliance is mandatory. The Director can order restitution and compensation to the consumer with this function (s 155(4)) without having to go through court proceedings. If a person fails to comply with a compliance order, he or she is committing an offence under s 189(5) and could face a fine of not more than $10,000, imprisonment for not more than 12 months, or both; | *e) issue a compliance order under s 155 of the ''BPCPA'' where compliance is mandatory. The Director can order restitution and compensation to the consumer with this function (s 155(4)) without having to go through court proceedings. If a person fails to comply with a compliance order, he or she is committing an offence under s 189(5) and could face a fine of not more than $10,000, imprisonment for not more than 12 months, or both; | ||
*f) seek declaration and/or injunctive relief on behalf of a consumer, or a class of consumers, and make their applications ex parte (s 172); and | *f) seek declaration and/or injunctive relief on behalf of a consumer, or a class of consumers, and make their applications ''ex parte'' (s 172); and | ||
*g) impose an administrative penalty under s 164. | *g) impose an administrative penalty under s 164. | ||
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=== 1. More than One Price Tag (“Double Ticketing”) === | === 1. More than One Price Tag (“Double Ticketing”) === | ||
Shopkeepers often mark goods for sale with more than one price tag. Under the ''Competition Act'', RSC 1985, c C-34, it is an offence for the store to charge anything but the lowest price unless the lower price has been crossed out or the new tag covers the older tag (s 54). The older | Shopkeepers often mark goods for sale with more than one price tag. Under the ''Competition Act'', RSC 1985, c C-34, it is an offence for the store to charge anything but the lowest price unless the lower price has been crossed out or the new tag covers the older tag (s 54). The older tag does not have to be unreadable; a line over it or a new tag slightly covering it is fine. However, a cashier may not cross out the older price at the cashier stand. Note that the consumer has no independent right of action. The Competition Bureau, on its website, indicates that “prosecutions under this section have rarely occurred”. | ||
=== 2. Advertising a Sale Price === | === 2. Advertising a Sale Price === | ||
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=== 3. Bait and Switch === | === 3. Bait and Switch === | ||
If a business advertises a sale, it must stock a reasonable quantity of the item (''Competition Act'' s 74.04(2)). The bait and switch tactic | If a business advertises a sale, it must stock a reasonable quantity of the item (''Competition Act'' s 74.04(2)). The bait and switch tactic occurs when a business advertises an item at a bargain price to attract customers but, having no intention of selling the item, does not adequately stock it. Rather, the business intends to use sale pressure to get customers to buy other, higher-priced items. | ||
If the business does not have adequate stock of a sale item, it must issue rain cheques. Rain cheques are not required, however, if the advertisement states “while quantities last”. | If the business does not have adequate stock of a sale item, it must issue rain cheques. Rain cheques are not required, however, if the advertisement states “while quantities last”. | ||
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== G. False or Misleading Advertising == | == G. False or Misleading Advertising == | ||
All advertising, whether on radio or television, in a newspaper or flyer or posted in a store, is subject to federal and provincial laws that prevent businesses from making false claims that may mislead consumers. The ''BPCPA''’s prohibition against deceptive acts and practices extends to advertising, as a representation made before a sale. (s 4(2)). | All advertising, whether on radio or television, in a newspaper or flyer or posted in a store, is subject to federal and provincial laws that prevent businesses from making false claims that may mislead consumers. The ''BPCPA''’s prohibition against deceptive acts and practices extends to advertising, as a representation made before a sale. (s 4(2)). | ||
Purchasers have a right to know what they are buying. If a person asks for information and the sales agent volunteers it, the information must be correct and not deceptive. However, not everything a salesperson says is a term of the contract; some comments are mere puffery. Puffery is | Purchasers have a right to know what they are buying. If a person asks for information and the sales agent volunteers it, the information '''must''' be correct and not deceptive. However, not everything a salesperson says is a term of the contract; some comments are mere puffery. Puffery is the sort of comment that is made to promote a product. Such comments are statements of opinion rather than misrepresentations of fact and are not treated as part of the contract. | ||
An example of puffery is “It’s a great little car.” | An example of puffery is “It’s a great little car.” | ||
An example of a statement of fact is “It's a 1994 Dodge.” | An example of a statement of fact is “It's a 1994 Dodge.” | ||
What would otherwise be puffery may constitute a deceptive act or practice under the ''BPCPA''. In circumstances where a supplier provides a laudatory description of a defective item of which he or she has specific factual knowledge and of which the potential buyer is wholly unaware, the description is not mere puffery, but rather a deceptive act. See ''Rushak'', above. | What would otherwise be puffery may constitute a deceptive act or practice under the ''BPCPA''. In circumstances where a supplier provides a laudatory description of a defective item of which he or she has specific factual knowledge and of which the potential buyer is wholly unaware, the description is not mere puffery, but rather a deceptive act. See ''Rushak'', above. | ||
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=== 1. The Common Law === | === 1. The Common Law === | ||
Despite the breadth of the ''BPCPA'', | Despite the breadth of the ''BPCPA'', it does not provide remedies for all contractual situations. Before commercial legislation (''SGA'') or consumer protection acts (''BPCPA''), the common law provided remedies for misrepresentation. | ||
==== a) Fraudulent Misrepresentation ==== | ==== a) Fraudulent Misrepresentation ==== | ||
Fraudulent misrepresentation occurs when the vendor knowingly makes a false statement of fact that is material to the contract and the statement | Fraudulent misrepresentation occurs when the vendor knowingly makes a false statement of fact that is material to the contract and the statement serves as an inducement to enter the contract. The buyer may be awarded the common law remedy of rescission and can also sue for damages in the tort of deceit. Breaches of contract damages, such as the expectation of profit, are not available, because a party cannot claim for the contract to be rescinded and, at the same time claim that the contract exists for the purposes of claiming damages. | ||
==== b) Innocent Misrepresentation ==== | ==== b) Innocent Misrepresentation ==== | ||
An innocent misrepresentation arises when a representation of fact is false, material to the contract, and the buyer is induced to enter the | An innocent misrepresentation arises when a representation of fact is false, material to the contract, and the buyer is induced to enter the contract by the representation. Unlike fraudulent misrepresentation, though the representation is not known to be false. The remedy, which is an equitable remedy, is rescission, which attempts to put the parties back in the position they were in before the contract. | ||
A misrepresentation might also be considered to be a term of the contract or as a term in a collateral contract. In this situation, the client can sue for damages if the misrepresentation ends up being untrue. | A misrepresentation might also be considered to be a term of the contract or as a term in a collateral contract. In this situation, the client can sue for damages if the misrepresentation ends up being untrue. | ||
For the remedy of rescission, there could be several possible bars: | For the remedy of rescission, there could be several possible bars: | ||
*i) third party rights have arisen; | *i) third party rights have arisen; | ||
*ii) an undue delay occurred since the misrepresentation; | *ii) an undue delay occurred since the misrepresentation; | ||
*iii) the contract has been executed (not an absolute bar); | *iii) the contract has been executed (not an absolute bar); | ||
*iv) the contract has been affirmed by the aggrieved party; or | *iv) the contract has been affirmed by the aggrieved party; or | ||
*v) it is impossible for the courts to undo the contract. | *v) it is impossible for the courts to undo the contract. | ||
==== c) Negligent Misrepresentation ==== | ==== c) Negligent Misrepresentation ==== | ||
Negligent misrepresentation operates in the same way as innocent misrepresentation, but it arises when the representation is made negligently | Negligent misrepresentation operates in the same way as innocent misrepresentation, but it arises when the representation is made negligently as opposed to in a completely innocent manner. As with innocent misrepresentation, the remedy is rescission. ''Hedley Bryne & Co Ltd v Heller and Partners Ltd'', [1961] 3 All ER 891 (HL) is one example of a case involving negligent misrepresentation. | ||
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