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Government Regulates Gift Cards,
Prohibits Expiry Dates

The provincial government has filed regulation 187/07 under the Consumer Protection Act regarding gift cards. The regulation will take effect October 1, 2007 and will affect every hospitality operator who sells gift cards/certificates. The regulation was filed after months of stakeholder consultations with business associations, including the ORHMA, and consumer groups.

The regulation will:

• apply to gift cards and gift certificates purchased by customers with a pre-paid specified dollar value, and
does not distinguish electronic vs. paper gift cards
and certificates;

• not apply to gift cards, certificates or coupons issued
for promotional or charitable purposes, discount coupons
or loyalty cards;

• not apply to pre-paid purchases of specific goods or services such as a pre-paid accommodations package;

• prohibit expiry dates to ensure gift cards retain their face value, and nullify expiry dates on old stock cards after the regulations come into effect;

• prohibit dormancy and inactivity/reactivation fees;

• allow for fees to replace lost or stolen gift cards or the customization of gift cards;

• outline disclosure requirements for terms and conditions; and

• outline consumer remedies and corporate penalties.

An expiry date on a card purchased on September 30, 2007 will continue to be valid and apply if the retailer chooses to enforce this expiry. The provisions apply to cards purchased on or after October 1, when the regulation takes effect.

For frequently asked questions about the new regulation click here
www.gov.on.ca/MGS/en/ConsProt/134042.html



Consumer Protection Act

The Ontario government's Ministry of Consumer and Business Services has announced that new consumer protection regulations have been filed under the Consumer Protection Act, 2002 (CPA). Regulations under the CPA came into force on July 30, 2005

The new regulations under the Consumer Protection Act 2002 focus on establishing fair business practices in the delivery of goods and services and transactions between businesses and consumers. Some of the changes include:

• New rules around disclosure in consumer agreements of special interest to:

(a) Businesses currently regulated under consumer protection laws such as motor vehicle repairs and personal development services such as fitness clubs and services for modeling and talent;

(b) Businesses that offer future performance agreements such as Internet contracts and Timeshare or vacation club contracts;

(c) Businesses that offer credit and engage in long-term leasing such as pay-day lenders and those offering rent-to-own contracts.

• New rules about consumer remedies to include cooling-off periods i.e. businesses that are now subject to cooling-off periods should review their contracts as well as their business practices to ensure they are ready to comply;

• New rules about amendments, renewal or extensions to consumer agreements and contracts. Businesses should examine the list of the types of agreements and contracts that are covered in the regulations.

Time share and vacation clubs seem to be a hot new trend in the accommodation sector. It will behove hotel and motel management that are in the time-share business to review the new regulations and seek legal counsel to ensure that their business practices conform. For example, any time share agreement can be cancelled by the purchaser within 10 days of signing and be subject to a full refund from the provider.

For a complete set of the new regulations,visit www.e-laws.gov.on.ca. Click on Regulations As Filed. From the menu select 2005
and under C select Consumer Protection Act (Ontario Regulation 17/05 made under the Consumer Protection Act 2002).

(Updated June, 2007)

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