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Internet Consumer Protection – The British Columbia Business Practices And Consumer Protection Act INTRODUCTION On July 4, 2004, most of the provisions of the new British Columbia Business Practices and Consumer Protection Act,1 will come into force.2 The Act, which consolidates six consumer protection statutes into an omnibus statute and provides significant new protection to consumers, together with the Business Practices and Consumer Authority Act3 and the

With some exceptions,5 the Act focuses on transactions between “consumers” and “suppliers”. “Consumer” is defined as “an individual, whether in British Columbia or not, who participates in a consumer transaction, but does not include a guarantor”. “Supplier” is defined to include all persons, whether in British Columbia or not, who participate in a consumer transaction in the course of business by supplying goods or services or real property to a consumer, or who

occur in British Columbia for the Act to apply. Nevertheless, courts will likely require that there

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Online: http://www.legis.gov.bc.ca/37th5th/3rd_read/gov02-3-toc.htm. Many of the practical requirements of the Act will be prescribed in regulations, which have not yet been issued.

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Certain parts of the Act, such as those concerning the disclosure of the cost of consumer credit, come into force on January 1, 2005.

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Online: http://www.legis.gov.bc.ca/37th5th/3rd_read/gov04_3.htm.

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Online: http://www.legis.gov.bc.ca/37th5th/3rd_read/gov03-03.htm

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For example, provisions regarding credit reporting and debt collection apply regardless of whether a consumer is involved.

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be a real and substantial connection to British Columbia for the Act to be applicable.

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of privity of contract. There is no express requirement that impugned transactions or practices

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solicit, offer, advertise or promote in respect of the supply, notwithstanding the existence or lack

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PROVISIONS OF GENERAL APPLICATION

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jurisdictions.

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as Internet transactions, and is intended to harmonize with the laws of other Canadian

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consumer protection in British Columbia. The Act addresses new areas of consumer law, such

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Cremation, Interment and Funeral Services Act,4 provides a stronger, simplified framework for

Internet Consumer Protection – The British Columbia Business Practices and Consumer Protection Act The Act contains provisions regarding unfair business practices, cost of consumer credit disclosures, debt collection and specific kinds of consumer transactions, including future performance contracts, continuing services contracts, time share contracts, direct sales contracts, distance sales contracts, preneed cemetery or funeral services contracts, funeral and interment right contracts, and credit and leasing agreements. With certain exceptions, the Act does not apply to a sale, lease, mortgage of or charge on land or a chattel real. Except for credit and leasing agreements, if a contract falls under the definition of more than one type of contract, all of the applicable provisions apply with any conflict or inconsistency to be determined in favour of the consumer. The Act provides consumers with substantial rights and entitlements, and imposes corresponding obligations on suppliers, including: mandatory information disclosure by suppliers; timely delivery rights; prohibitions against false or misleading advertising, unconscionable or unfair business practices, and aggressive debt collection; and the right to participate in consumer class proceedings despite any agreement to the contrary. Consumers are also protected against legal obligations for unsolicited goods and services (commonly referred to as “negative option billing”), and are provided with special rights and remedies regarding those transactions. The Act also provides consumers with important remedies, including rights to cancel certain agreements if they do not comply with the Act or if delivery is late and, if the supplier has not timely provided a required refund, to reverse payment or receive credit card refunds for the price of the goods or services plus any associated interest or other charges related to the consumer transaction.

Aggrieved consumers can commence court proceedings in British Columbia

notwithstanding any contractual agreement to submit disputes to arbitration, and in certain circumstances may apply for compensation from a compensation fund. Generally, consumers cannot waive or release their rights, benefits or protections under the Act. Accordingly, suppliers cannot avoid the application of the Act by requiring consumers to sign contractual waivers. Any person other than a supplier may bring an action in British Columbia Supreme Court for a declaration that an act or practice engaged in or about to be engaged in by a supplier in respect of a consumer transaction contravenes the Act or regulations. The applicant may also seek an

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Internet Consumer Protection – The British Columbia Business Practices and Consumer Protection Act interim or permanent injunction restraining a supplier from contravening the Act or regulations. In considering whether to issue an interim injunction, the court must give greater weight to the protection of consumers than to suppliers’ interests, and the applicant is not required to establish that irreparable harm will result if the injunction is not granted. Consequences for non-compliance with the Act may include enforcement orders, administrative penalties, court orders, fines and imprisonment.

The companion Business Practices and

Consumer Protection Authority Act establishes an independent authority responsible for enforcing the Act, with the power to investigate suppliers, require undertakings and make compliance and freezing orders that are enforceable as court orders. Failure to comply with any of those enforcement orders, or a contravention of certain prescribed provisions of the Act, may result in an administrative penalty of a maximum of $5,000 for an individual and a maximum of $50,000 for a corporation. An officer, director or agent who authorized, permitted or acquiesced in a corporation acting in contravention of the Act or regulatory orders is also liable. Administrative penalties are paid into the Consumer Advancement Fund, which is used for a variety of purposes related to the Act, such as educating consumers or ensuring compliance. Certain violations of the Act or regulations, such as engaging in deceptive or unconscionable acts or practices or refusing or failing to provide information as required under the Act, constitute offences. A person that commits an offence under the Act is: (i) if an individual, liable to a maximum $10,000 fine or 12 months imprisonment or both; (ii) if a corporation, liable to a maximum $100,000 fine; or (iii) notwithstanding these maximum penalties, liable for up to 3 times the court’s estimation of the amount of monetary benefit acquired or accrued as a result of the commission of the offence.

An officer, director or agent who authorized, permitted or

acquiesced in a corporation committing an offence also commits the offence, regardless of whether the corporation is prosecuted. In addition, the court may require a person convicted under the Act to compensate aggrieved consumers and guarantors for pecuniary losses (unless they have already commenced an action against the supplier). INTERNET CONSUMER PROTECTION PROVISIONS The Act contains provisions specifically directed to Internet consumer transactions.

Those

provisions, along with the consumer rights and remedies of general application, apply to all consumer transactions that are “distance sales contracts”, which are defined as contracts for the

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Internet Consumer Protection – The British Columbia Business Practices and Consumer Protection Act supply of goods or services between a supplier and a consumer that are not entered into in person and, with respect to goods, for which the consumer does not have the opportunity to inspect the goods before the contracts are entered into. Those provisions are intended to generally implement the Internet Sales Contract Harmonization Template6 approved by Canadian federal, provincial and territorial governments in 2001. The following is a summary of the Internet consumer protection provisions: Information Disclosure: The Act requires suppliers to make prescribed information disclosures before consumers enter into an Internet agreement.

The prescribed

information disclosures are generally consistent with the standards set out in the Canadian Code of Practice for Consumer Protection in Electronic Commerce,7 endorsed by Canadian federal, provincial and territorial Ministers responsible for consumer affairs in January 2004.

The information disclosures must be clear, comprehensible and

prominent, and must be accessible and available in a manner that ensures that the consumer has accessed the information and is able to retain and print the information.8 It is important to note that the information disclosures prescribed by the Act are baseline standards for disclosure, and prudent business practices may require additional disclosures. Contract Verification: Suppliers must provide consumers with an express opportunity to accept or decline an Internet agreement and to correct errors before entering into it. Content of Agreement:

An Internet agreement must include all the information

suppliers are required to disclose before entering into the agreement, the consumer’s name, and the date on which the agreement was entered into. Supplier’s Obligation to Provide Agreement:

Suppliers must give a copy of the

Internet agreement to consumers within 15 days. A supplier may give a copy of the Internet agreement to a consumer by sending the copy by email to the email address the 6

Online: http://strategis.ic.gc.ca/epic/internet/inoca-bc.nsf/vwapj/Sales_Template.pdf/$FILE/Sales_Template.pdf.

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Online: http://cmcweb.ca/epic/internet/incmccmc.nsf/vwapj/EcommPrinciples2003_e.pdf/$FILE/EcommPrinciples2003_e.

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These access, retention and print requirements as well as the contract verification requirements, are only applicable to a distance sales contract that is in “electronic” form, as defined in the Electronic Transaction Act.

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Internet Consumer Protection – The British Columbia Business Practices and Consumer Protection Act consumer provided to the supplier for providing information related to the agreement, in accordance with the provisions setting out the manner of giving or service of documents generally, or in any other manner that enables the supplier to prove that the consumer has received and retained a copy of the agreement. A copy of the Internet Agreement sent by email is deemed to be received on the third day after it is sent, or earlier upon actual receipt. Consumer Cancellation Rights: A consumer may cancel an Internet agreement at any time within 7 days after the consumer receives a copy of the agreement if: (a) the agreement does not contain the prescribed information; (b) the supplier did not make the information available in a manner that ensured that the consumer accessed the information and was able to retain and print the information; or (c) the supplier did not provide the consumer with an express opportunity to accept or decline the agreement or to correct errors in the agreement. A consumer may cancel an Internet agreement within 30 days after the date the agreement is entered into if the supplier does not provide the consumer with a copy of the agreement or the goods or services are late. Cancellation of Related Agreements: Upon cancellation of an Internet agreement in the manner outlined above, the following are also cancelled:

any other related

consumer transaction; any guarantee given in respect of the total price under the agreement; any security given by the consumer in respect of the total price under the agreement; and any credit agreement, whether or not a part of or attached to the Internet agreement, if extended or arranged by the supplier in respect of the Internet agreement. Credit Card Charge Backs: If a consumer cancels an Internet agreement involving a credit card payment according to the consumer cancellation rights outlined above, and the supplier does not refund to the consumer all of the money received in respect of the agreement and any related consumer transaction, the consumer may require the credit card issuer to cancel or reverse any related credit card payment plus any associated interest and other charges.

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Internet Consumer Protection – The British Columbia Business Practices and Consumer Protection Act COMMENT The Business Practices and Consumer Protection Act consolidates various consumer protection statutes, provides increased protection to consumers regarding various kinds of transactions, including Internet consumer transactions, and imposes corresponding obligations on suppliers. The Act applies to transactions whether or not the consumer is located in British Columbia, and suppliers cannot rely on contractual provisions to avoid the application of the Act or the jurisdiction of British Columbia courts. Accordingly, suppliers who engage in Internet consumer transactions that are at least in part conducted in British Columbia should ensure that their business processes and documents comply with the Act and its regulations.

This article provides only general information, and does not constitute legal or other professional advice. Readers are encouraged to obtain legal advice from a competent professional regarding their particular circumstances. Copyright © 2004 Borden Ladner Gervais LLP.

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