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Buyer’s remorse: that feeling you get the moment you realize you’ve made a purchasing decision that seemed like a good idea at the time, but later seems like a huge mistake. Buyer’s remorse can happen for a number of reasons, and is especially common where you feel pressure to make a decision, or do not have all of the information you need to make the decision feel comfortable. Phrases like “limited time offer” or “last chance” can lead a consumer into making a purchasing decision without having fully considered the consequences, and high pressure sales tactics and fast talk can cause vulnerable consumers to feel taken advantage of. So what are your options when you find you have signed up for a service you don’t want or need, or have agreed to buy goods you have no use for, now that you have thought it through? What happens if you receive a copy of the agreement you entered into, only to discover that it does not say what you expected it to say, cost what you expected it to cost, or contains terms you didn’t agree to?

The Ontario Consumer Protection Act, 2002, (the “Act”), is comprehensive legislation governing most everyday consumer transactions in Ontario. In its objective to place Ontario at the forefront of consumer protection legislation in Canada, Ontario designed the Act to protect individuals when entering into consumer agreements, and to provide them with options, when cancelling a transaction becomes necessary. At the same time, the Act puts certain obligations on suppliers to ensure that consumers are able to make fully informed purchasing decisions that are based on complete and honest information.

The following provides an overview of some key provisions in the Act and factors to consider when determining whether to cancel a consumer agreement.

1. Determine whether the Consumer Protection Act applies to your situation.

The Consumer Protection Act does not protect private transactions between individuals, or transactions that occur between businesses. The Act defines a “consumer” as an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes. A “supplier,” on the other hand, is defined as a person who is in the business of selling, leasing or trading in goods or services or is otherwise in the business of supplying goods or services, and includes an agent of the supplier and a person who holds them-self out to be a supplier or an agent of the supplier.

While consumer agreements can arise under a variety of circumstances, the Act defines a “consumer agreement” fairly broadly. For the purposes of the Act, a consumer agreement is an agreement between a supplier and a consumer in which the supplier agrees to supply goods or services for payment. It is important to note that not all agreements between consumers and suppliers fall under the protection of the Act. For example, while time share agreements are covered under the Act, real property transactions (buying and selling a house or a piece of land), are not. In addition, certain financial services and professional services that are regulated by other statutes are not covered by the Act, nor are organizations that are privately owned by its members, (such as golf clubs), not-for-profit organizations or co-operatives.

Finally, the Consumer Protection Act, applies to “consumer transactions” if the “consumer” or the person engaging in the transaction with the consumer is located in Ontario when the transaction takes place. In plain English, if you purchased, or agree to purchase, goods or services from a supplier in Ontario, the Consumer Protection Act likely applies. Likewise, if you are in Ontario but purchase, or agree to purchase, goods or services from a supplier who conducts business in Ontario but is located elsewhere, the Consumer Protection Act likely applies.

2. Determine what type of Agreement you have entered into.

Some of the remedies and options for cancelling agreements available under the Act are only applicable where goods or services are provided on an ongoing or repeat basis, rather than a single occasion purchase. Returning an item to the store, for example, is different than trying to cancel a gym membership where you have agreed to have money withdrawn from your account on a monthly basis, or trying to cancel an agreement for ongoing lawn care services where you may have paid some or all of the money up front.

In order to determine under what circumstances you can cancel the agreement, it will also be necessary to consider how and where you entered into it. Was the agreement entered into at the supplier’s place of business, at your home, over the internet or remotely? You will also need to know whether the agreement is a future performance agreement, such that the supplier will provide a product or service at a later time. Lawn maintenance agreements, for example, are often future performance agreements. Once you know what kind of agreement you have, you will be in a better position to understand whether cancelling the agreement is an option, and if it is, how much time you have to cancel and what you need to do to communicate to the supplier that you are no longer interested.

3. Does your total potential payment obligation under the agreement exceed $50?

Internet agreements, remote agreements (where the consumer and the supplier are not in the same location when the agreement was made), future performance agreements and personal development service contracts (such as gym memberships or diet programs), all require that the total value of the goods or services exceed $50 in order for the remedies available under the Act to apply.

4.  Was a copy of the written documentation provided to you?

If a copy of the agreement was provided to you, the Consumer Protection Act provides a 10 day “cooling off” period following receipt of a written agreement, to give consumers a chance to cancel the sales agreement once they have had time to review all of the terms and conditions. Common examples of the types of agreements to which a 10 day cooling off period applies, are direct agreements such as door-to-door agreements, personal development agreements, and time-share agreements. While it is best to advise the supplier in writing that you are cancelling the agreement, when taking advantage of the cooling off period under the Act, consumers are not required to provide a reason for the cancellation. Simply contacting the supplier within 10 days of entering into the agreement and advising that you wish to cancel should be sufficient.

If you enter into an agreement to which the cooling off period applies and the agreement is not provided to you or it turns out that you were weren’t given all of the required information at the time of purchase, you have up to one year to cancel the agreement. Any money paid by you must be refunded by the business within 15 days. If the agreement you are canceling relates to goods as opposed to services, the business has a right to have the goods returned.

The cooling off period does not apply to future performance agreements, remote agreements or internet agreements, but you still may be able to cancel the agreement in certain situations. Internet agreements can be cancelled by a consumer within 7 days, if you were not provided with relevant information before entering the agreement, were not given an opportunity to accept or decline the agreement, or were not given the chance to correct any errors immediately before entering into it.

For other types of remote agreements, you may cancel within 7 days of receiving the written agreement if certain information was not provided to you before entering the agreement, or within one year if the agreement is not delivered to you or does not contain all of the required information. While future performance agreements can also be cancelled within a year if the agreement is not delivered or is incomplete, circumstances for cancelling when a supplier fails to perform a service or deliver goods have slightly different timing requirements, discussed further below. In each of these situations, cancellation should be done in writing.

As mentioned above, the Act places obligations on suppliers to ensure that consumers are given complete and honest disclosure. Accordingly, it is important that you receive a copy of the agreement and are given an opportunity to review it before you are bound by the terms contained within it.

5.  Does the Agreement contain terms that you did not agree to, or information that was not disclosed to you at the time you entered into it? 

Suppliers are prohibited by the Act from engaging in any unfair practice and where a supplier is found to have done so, the consumer has a right to terminate the agreement. The Act outlines several types of unfair practices that justify cancelation of a consumer agreement, and includes a false, misleading, or deceptive representation.

Under the Act, just as stating something false is considered an unfair practice, so is a failure to state something material. The Act provides that any agreement, whether made orally or in writing entered into by a consumer after or while a person has engaged in an unfair practice may be cancelled by the consumer. In these situations, the consumer is entitled to any remedy available in law, including damages. This means that where the issue cannot be resolved, a consumer may be successful in a court action where a supplier is shown to have engaged in an unfair practice.

For the most part, establishing what constitutes an unfair practice can be done using common sense. Suppliers cannot, for example, represent to you that you are getting a benefit or price advantage that you are not actually getting, mislead you about the quality or standard of goods or services or deceive you in any way that induces you to enter into the agreement. It is also an unfair practice for a supplier to represent to you that a service, part, replacement or repair is needed or advisable if it is not, or, as previously mentioned, to fail to tell you there are additional charges or obligations associated with the agreement that you may not have been aware of.

In addition, the Act requires that suppliers clearly and prominently disclose certain information that consumers need to know in order to make an informed purchasing decision. Examples include, any “hidden” or additional fees that may not be included in the base price, or situations where you must pay for something additional in order to make use of a product or service. In addition to disclosing that certain fees exist, suppliers must also disclose the true nature of all fees. A supplier cannot indicate that a certain fee is a “tax” for instance, if it is not a tax or indicate that a fee is a government required fee, if it is not.

If on reviewing the agreement you find that the supplier has engaged in any unfair practice, you may terminate the agreement with written notice to the supplier within one year from the date on which you entered into the agreement.

6.  Was the agreement entered into by a vulnerable consumer?

The Act contains provisions for protecting vulnerable consumers. If it appears that a vulnerable consumer has been taken advantage of by a supplier engaging in an unfair practice, the agreement may be cancelled, whether the agreement was made orally or in writing. Examples include situations where there the consumer is not reasonably able to protect his or her interests because of disability, ignorance, illiteracy, inability to understand the language of an agreement or similar factors, or situations where the price grossly exceeds the price at which similar goods or services are readily available to like consumers. In these situations, the consumer must send written notice to the supplier within one year.

7.  Did you actually get the product or service you bargained for?

For agreements where delivery of goods or services is to take place at a later date, (future performance agreements), whether or not money is paid up front, consumers can cancel within one year if a copy of the agreement is not received or does not contain all of the required information. Cancelation should be in writing, and any money is refundable by the supplier. In these situations, the Act contains provisions that may allow a supplier to retain money owed for services already rendered.

You may also cancel a future performance agreement within 30 days of the promised date of delivery of the goods or performance of the service, if the supplier fails to make delivery or perform the service. Where a consumer agrees, suppliers who cannot deliver on time are permitted to amend the agreement with the consumer, but any such amendment must be in writing. Even an agreement to late delivery is subject to the 30 day cancellation provision, if failure to deliver or perform the services does not commence within thirty days of the newly agreed date.

If the agreement you entered into is not a future performance agreement, and you find you did not get what you paid for, consider whether the supplier has engaged in an unfair practice to induce you to buy. As previously stated, consumer agreements entered into while a supplier has engaged in an unfair practice, may be cancelled with written notice within one year.

For personal development services, suppliers are required to provide you with a facility by a specified time. If, for example, you signed up for a gym membership and the gym is not yet built, you may cancel the agreement either within the 10 day cooling off period, or at any time after the date on which you were told the facility would become available if it is not yet available. If you have paid money, you are entitled to a refund.

The rules are slightly different if you have agreed to use an alternative facility until the facility to which your agreement relates becomes available. If you agreed to use an alternative facility, you may still be able to cancel the agreement if the facility is not available at the specified time, but whether you can obtain a refund may depend on what was agreed to at the time, if an alternative was made available to you.

8.  What do you need to do to cancel the agreement?

While it is always wise to cancel an agreement in writing, certain provisions in the Act provide that notice may be given to the supplier by any means. When taking advantage of the cooling off period, you are not required to provide a reason for the cancellation. If you are cancelling the agreement because a copy of the agreement was not provided to you, for failure to deliver goods or perform the services on time, or on the basis that you believe the supplier has engaged in an unfair practice, it may be necessary to state the basis on which you are cancelling the agreement, and to reference the relevant sections of the Act. Depending on the complexity of your issue and the amount of money at stake, it may be advisable to have a lawyer assist you with drafting the letter, collecting the refund, or commencing a court action if the matter cannot be resolved through other means.

When giving notice of cancellation, write a clear statement about your intention to cancel, the reason for the cancellation, and what your expectation is resulting from the cancellation. For example, specify that you want a refund or that you no longer authorize automatic withdrawals from your bank account or charges to your credit card.

Once a supplier has received notice of your intention to cancel the agreement, the supplier has an obligation to refund any money paid within 15 days. Where you have provided goods to the supplier (such as in a trade-in arrangement), the supplier must return the goods to you in substantially the same condition as they were when the supplier received them.

Similarly, if you have received goods from the supplier and now wish to cancel the agreement, you have an obligation to return the goods at the supplier’s request, and also to take reasonable care to ensure the goods remain in substantially the same condition as when you received them. In situations where services have already been performed, or goods are no longer returnable because they have been used or have perished, you may have an obligation to provide the supplier with reasonable compensation for the work performed or goods received, or to have the money offset from any refund you may otherwise be entitled to.

9. Seek professional assistance!

The above steps are general guidelines only. It is not always easy to determine what rules under the Act apply to a particular situation. Sometimes, agreements may fall under more than one section of the Act, which can open up options for cancelling that might not otherwise be available. If you entered into an agreement at your door for ongoing services for example, the agreement may be characterized as both a direct agreement and a future performance agreement. While the 10 day cooling off period does not apply to future performance agreements, it does apply to direct agreements, and the transaction may be cancelled on that basis.

Since many of the cancellation rights under the Act are time sensitive, it is a good idea to get professional advice about cancelling your agreement or providing proper notice if you are unsure, and particularly in determining whether a court action may be necessary to permit you to recover any money owed to you. Even with proper and timely notice, resolution can be difficult where the parties do not agree on what was agreed to, or whether the agreement meets the requirements of the Act. As is typically the case, disagreement is more likely to occur between a consumer and a supplier where large sums of money are involved. In situations where an unscrupulous supplier appears to have taken advantage of a vulnerable consumer, that same unscrupulous supplier may further take advantage of the vulnerability when dealing with a request to cancel. If you feel that special circumstances led you or someone you know to be a target for a supplier’s unfair practice, don’t hesitate to request assistance in getting out of an agreement. Chances are the Act contains provisions that can help.

Ontario consumers are well protected when it comes to entering into consumer agreements, making informed purchasing decisions, and cancelling transactions that fall within the purview of the Consumer Protection Act. The next time you are experiencing buyer’s remorse, consider whether a cooling off period applies, whether you were misguided or misinformed, or whether taking the time to review all of the terms and conditions is just what you need to make the purchasing decision more comfortable.

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