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A recent decision certifying a class action for prepaid payment cards demonstrates the potential of Ontario’s Consumer Protection Act and the limits of creative technical arguments at the threshold certification stage.

Case Background

Bernstein v Peoples Trust Company is a class action regarding certain prepaid Visa and Prepaid issued by the Defendants. The Plaintiff alleges that the terms of the cards, sold in drug and convenience stores, violated certain provisions of the Consumer Protection Act, 2002. In particular, the Plaintiff challenged the presence of an expiry date and certain administrative/maintenance fees on the cards, alleging they violated the gift card provisions of the Consumer Protection Act, 2002 (“CPA”) which forbid expiry dates and most types of fees.

Primary Legal Issues

Are the prepaid cards gift cards financial services products?

Peoples claimed that its prepayment were not “future performance agreements” as required to fit the requirement of the CPA but rather that they were financial services products, which the CPA does not apply. Further complicating its argument was the reality that as a federally regulated company People’s’ products were not specifically exempted by the CPA even if they were financial services products. The court characterized these issues as “challenging problems of statutory interpretation” and simply declined to engage in a full analysis, noting that “mercifully, for present purposes, I do not have to decide these challenging problems of statutory interpretation.”

What is the nature of the gift cards?

Peoples also argued that payments were not “future performance agreements,” as required by the CPA’s gift card provisions, but rather cash replacement services whose performance was complete at the time the parties activated the service. The Court noted that this argument was “reasonably strong”, pointing to a prior case that held that prepaid calling cards were not future performance agreements. Even so, the court held that People’s argument was not enough at the preliminary certification stage, where a court need only determine that it was plain and obvious that the argument would not succeed, since the calling card decision was potentially distinguishable.


In the end, the court certified the case, determining that the plaintiff established all five elements of the certification test and so could proceed to trial. In so doing, the court demonstrated that there are limits to how much it will delve into legal issues at the certification stage.

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