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Government Regulates Gift Cards,
Prohibits Expiry Dates

Effective October 1, 2007 expiry dates on dollar-value gift cards are prohibited, according to regulation 187/07 under the Consumer Protection Act.

The regulation:

• applies 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;

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

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

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

• prohibits dormancy and inactivity/reactivation fees;

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

• outlines disclosure requirements for terms and conditions; and

• outlines 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 took effect.


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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