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Consumer Protection (Ontario) Law - General CPA Law
Chapter 9 - Prosecutions
(01 July 2013)- Overview
- Elements of an Offence
(a) Overview
(b) Mens Rea: Strict Liability
(c) Actus Reus and Forms of the Offence
. Overview
. Main Form of Offence
. 'Officer or Director' Form of Offence
. Attempt Form of Offence
- The General Offences
(a) Overview
(b) Fail to Comply with CPA Order
(C) Contravention of Any CPA Regulation Provision
- Offences Relating to General Consumer Rights
(a) Overview
(b) Charging More than 10% of Estimate
(c) Demand or Representation Re Negative-Option Charge
(d) Failure of Supplier to Refund Negative-Option Payment
(e) Failure of Supplier to Refund Illegal Payment After Demand
- Offences Relating to CPA Civil Remedies
(a) Overview
(b) Charging Illegal Assistance Charge
(c) Failure of Supplier On Cancellation of Consumer Agreement to Refund Payments and Return Trade-In or Its Value
(d) Failure by Credit Card Issuer to Process Consumer Refund Demand, and If Necessary, Cancel or Reverse Illegal Payment
- Offences Relating to Unfair Practices
(a) Engaging in an Unfair Practice
- Offences Relating to Illegal Internet Gaming Sites
(a) Overview
(b) Advertising Illegal Internet Gaming Site
(c) Facilitating Advertising of Illegal Internet Gaming Site
- Offences Relating to Personal Development Services
(a) Overview
(b) Charging Personal Development Services Charges Where Non-Compliant Agreement
(c) Charging Illegal Initiation Fees Re Personal Development Services
(d) Failure to Provide CPA-Compliant Monthly Instalment Plan Re Personal Development Services Consumer Agreement
(e) Charging Excessive Instalment Plan Amount Re Personal Development Services Consumer Agreement
(f) Receiving Payment for Unavailable Personal Development Services Except to Trustee
- Offences Relating to Loan Brokering
(a) Overview
(b) Loan Brokering But Failure to Deliver to Consumer CPA-Compliant Consumer Agreement
(c) Charging Advance Payment Re Loan Brokering
(d) Loan Broker Making Prohibited Representation
- Offences Relating to Credit Repair
(a) Overview
(b) Credit Repair But Failure to Deliver to Consumer CPA-Compliant Consumer Agreement
(c) Charging Advance Payment Re Credit Repair
(d) Credit Repairer Making Prohibited Representation
- Offences Relating to Motor Vehicle Repair
(a) Overview
(b) Charging for Motor Vehicle Repair Before Giving CPA Compliant Estimate
(c) Motor Vehicle Repairer Charging Estimate Fee Without Prior Notice
(d) Motor Vehicle Repairer Charging Estimate Fee Where Work or Repairs Authorized and Done
(e) Motor Vehicle Repairer Charging for Work Done Without Authorization
(f) Motor Vehicle Repairer Charging More Than 10% of Estimate
(g) Failure of Motor Vehicle Repairer to Post Signs
(h) Failure of Motor Vehicle Repairer to Offer to Return Parts and/or to Return Parts
(i) Failure of Motor Vehicle Repairer to Properly Keep Separate and/or Return Parts
(j) Failure of Motor Vehicle Repairer to Deliver Proper Invoice
(k) Giving Excessive Estimate or Charging Excessive Cost Because Insurance Company Paying for Work or Repairs
- Offences Relating to Loans and Credit Agreements
(a) Overview
(b) Failure to Correct Error in Open Credit Agreement Statement of Account
(c) Failure of Lender Who Offers Credit Agreement Insurance to Disclose to Borrower that Borrower May Purchase Own Insurance
(d) Failure of Lender to Refund or Credit Cost of Borrowing Monies, Other than Interest, on Prepayment by Borrower of Credit Agreement for Fixed Credit
(e) Lender Making Prohibited Representation
(f) Failure of Lender to Disclose Details of Any Loan Brokerage Fees
(g) Where Credit Application Sent to Lender, Failure of Loan Broker to Deliver Proper Initial Disclosure Statement to Borrower
(h) Failure of Lender to Deliver CPA-Compliant Initial Disclosure Statement to Borrower
(i) Failure of Lender to Deliver CPA-Compliant Subsequent Disclosure Where Fixed Credit and Floating Interest Rate
(j) Failure of Lender to Deliver CPA-Compliant Subsequent Disclosure Where Fixed Credit and Variable Interest Rate
(k) Failure of Lender to Notify Borrower When Scheduled Payments for Fixed Credit Agreement Insufficient to Pay Off Interest Accrued Because Principal Increase Due to Default Charges or Missed Payments
(l) Failure of Lender to Deliver Supplementary Disclosure Statement After Amendment to Fixed Credit Agreement
(m) Failure of Lender to Deliver CPA-Compliant Monthly Statement of Account Where Open Credit Agreement
(n) Failure of Lender under Open Credit Agreement to Provide Toll-Free Inquiry Phone Number
(o) Failure of Lender Under Open Credt Agreement to Deliver Subsequent Disclosure Statements Before and After Interest Rate Change
(p) Failure of Lender Under Open Credit Agreement to Deliver Supplementary Disclosure Statement Within 30 Days After Amendment
(q) Failure of Lender Under Credit Card Agreement to Deliver Supplementary Disclosure Statements As Required
(r) Failure of Assignor of Negotiable Instrument Given Under Credit Agreement to Deliver to Assignee Required Documentation
(s) Failure of Assignee of Negotiable Instrument On Re-Assignment Given Re-Assignee Required Documentation
- Offences Relating to Chattel Leases
(a) Overview
(b) Making CPA Non-Compliant Representations Re Chattel Lease Cost
(c) Failure to Deliver CPA-Compliant Disclosure Statement re Chattel Lease - Who May be Charged
(a) Overview
(b) Persons
(c) Corporations
(d) Partnerships and Sole Proprietorships
(e) 'Officer or Director' Form of Offences
- Evidence
(a) Overview
(b) Evidence from CPA Investigations
(c) Use of Evidence Certificates
(d) Testimonial Evidence of CPA Staff
- Limitations
- Penalties
- Compensation and Restitution Orders on Prosecution
- Collection of Fines
(a) Overview
(b) Consumer (Credit) Reporting
(c) Liens
. Overview
. Liens on Chattels Registered under PPSA
. Lien Against Real Estate Registered 'On Title'
. Discharge of Lien
1. Overview
Like many primarily administrative regulatory regimes on Ontario law, the Consumer Protection Act (CPA) regime provides that some statute and regulation violations, and as well violations of CPA orders, are prosecutable offences. These are not true criminal offences (creating criminal offence provisions is exclusively a federal jurisdiction), but they are sometimes called quasi-criminal or regulatory offences.
Similar to criminal offences, proving them normally requires proving two elements: the mental element (mens rea), and the behavioural element (actus reus). An omission generally can satisfy the actus reus requirement if the person is under a legal duty to act but failed to do so. With regulatory offences such as we are dealing with here, the mental element is typically diluted and replaced with something called 'strict liability' (explained in s.2 below).
Procedures for prosecuting and defending such regulatory offences are governed by the Provincial Offences Act (POA) and its regulations.
Provincial Offences Act
It is beyond the scope of this Isthatlegal.ca Consumer Law (Ontario) Legal Guide to explain POA court procedures in more depth.
2. Elements of an Offence
(a) Overview
The elements required to prove an offence are generally considered to be the 'mens rea' (knowledge or intention) and 'actus reus' (behaviour). While these are traditional criminal law categories, the concept of 'mens rea' has a strained meaning when it comes to regulatory law, all revolving around the key concept of 'strict liability'.
The concept of actus reus, while fairly straightforward and non-technical in concept, comes in three primary forms - any one of which can ground a CPA offence. These forms are: 'main', 'officer or director' and 'attempt'.
(b) Mens Rea: Strict Liability
Criminal 'mens rea' offences usually requires that the prosecution prove some type of criminal intent ("mens rea") on the part of the defendant to commit the acts or omissions which constitute the offence. This normally means knowledge or intention that the acts or omissions that the person does commit, will result in the illegal consequences (eg. intentionally pulling the trigger on a loaded gun while it is pointed at someone, will result in the illegal act of injuring or killing them).
In cases of true criminal offences (ones located in the federal Criminal Code of Canada), a full mens rea requirement of knowledge or intention will be usually inferred as a matter of law even if the provision does not expressly call for it. However, regulatory offences do not include this requirement unless the statute creating the offence expressly includes the terms "knowingly" or "intentionally" or some similar wording. As the CPA does not not include such terms in its offence provisions, CPA offences are not full mens rea offences.
When such wording is lacking in regulatory offences they can be either what are called 'strict liability' offences or 'absolute liability' offences. Simply put, a 'strict liability' offence requires the prosecution to prove the acts or omissions (the 'actus reus') of the offence, and then offers the defendant a chance to exonerate themselves if they can show - on balance of probabilities- that they were not negligent in their behaviour (this is called a 'due diligence' defence).
An absolute liability offence on the other hand does not offer this 'due diligence' defence, and essentially the defendant can only hope to undermine the proof that they did commit the acts alleged.
There are a variety of factors that can be applied to determine into which of these two categories the particular offence you are considering falls into, however when the offence has a potential sentence of any degree of incarceration, the law prohibits it being categorized as absolute. In reality, very few offences are absolute liability offences, and because they are so hard to defend they are usually reserved for minor offences like parking violations.
As can be seen below in s.17 ["Penalties"], the CPA offence provisions [CPA 116(5)] do provide for incareration, so the CPA offences cannot be 'absolute liability' offences. They therefore must be 'strict liability' offences. These are sometimes also called "negligence" offences as the defence focusses on the steps (if any) taken by the defendant to avoid their behaviour.
(c) Actus Reus and Forms of the Offence
. Overview
There is nothing special to understand about the concept of actus reus. It is simply the question of whether the defendant did (or neglected to do) the acts or omissions that they are charged with, and it is answered without any consideration of whether they intended to act that way or not.
The next several sections [ss.3-13] set out the 'actus reus' of the over 50 'main form' offences under the Consumer Protection Act (CPA) [CPA 116(1,2)], with references to more detailed discussions about the law upon which they are based.
Below I consider the three primary 'forms' in which CPA offences can be committed: main, officer or director and attempt. They are defined and distinguished from one another by their different actus reus requirements.
Several other forms of committing regulatory offences, less often charged, are set out at ss.77 and 78 of the Provincial Offences Act, linked here (eg. counselling, abetting, etc):
Provincial Offences Act, ss.77-78. Main Form of Offence
The 'main' form of any CPA offence is what you would expect it to be: a party charged with committing the offence as it is spelled out in ss.3-13 below.
. 'Officer or Director' Form of Offence
The discussion in s.14(e) below ["Who May be Charged?: Officer or Director' Form of Offences"] explains how the actus reus for the 'officer or director' form of the offence is met when the defendant "fails to take reasonable care to prevent the corporation from committing an offence" [CPA 116(3)]. As a practical matter this form of the offence will not be charged except when the main forms are charged as well, though it is arguable that the 'director or officer' form of the offence does not
require that a main offence be committed as well.
. Attempt Form of Offence
The offences set out in ss.3-13 below may also be committed in the 'attempt' form:CPA 116(4)
Any person who attempts to commit any offence referred to in subsection (1) or (2) is guilty of an offence.
[subsection (1) and (2) are all the main form offences listed below in ss.3-13]. The attempt form of the offences requires the same 'strict liability' mental element, but the behavioural element is satisfied by any act or omission done in furtherance of carrying out the offence.
Commission of an offence in the 'attempt' form is punishable by the same penalty as for the main form of the offences [see s.17 below: "Penalties"].
3. The General Offences
(a) Overview
While most of the offences related to the Consumer Protection Act itself (ie. the Act as opposed to the Regulation) are articulated as separate offences and addressed in the following sections [ss.4-13], there are some general offences as set out here.
(b) Fail to Comply with CPA Order
The behavioural element for this offence is committed when a person "fails to comply with any order, direction or other requirement under this Act".
Most such 'orders and directions' are covered in Ch.8: ["CPA Administrative Enforcement"].
(c) Contravention of Any CPA Regulation Provision
The behavioural element for this offence is committed when a person "contravenes or fails to comply with a provision of a regulation made under this Act" [CPA 116(2)].
The main regulation made under the CPA is 'General Regulation 17/05'. All of its provisions are integrated into this Consumer Law (Ontario) Guide and referenced like this: [CP Reg s...].
While contraventions of the Consumer Protection Act itself are set out individually, there is only one omnibus offence for breaching a regulation provision [CPA 116(2)]: CPA 116(2)
A person who contravenes or fails to comply with a provision of a regulation made under this Act is guilty of an offence. When charged, details of the specific regulation breach will have to be added in the 'information' (the charge-initiating document).
4. Offences Relating to General Consumer Rights
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in Ch.5: "CPA Consumer Rights".
(b) Charging More than 10% of Estimate
The behavioural elements for this offence is committed when a supplier gives an estimate and then "charge(s) the consumer an amount that exceeds the estimate by more than 10 per cent" [CPA s.10(1)]. Some exceptions apply.
This topic is discussed more fully in Ch.5, s.4 ["Consumer Rights: Prices, Estimates and Illegal Charges"].
(c) Demand or Representation Re Negative-Option Charge
The behavioural element for this offence is committed when a supplier "demand(s) payment or make(s) any representation that suggests that a consumer is required to make payment in respect of any unsolicited goods or services despite their use, receipt, misuse, loss, damage or theft" [CPA 13(2)].
This topic is discussed more fully in Ch.5, s.5(c) ["CPA Consumer Right: Negative-Option Contract Formation: The Unsolicited Consideration Rule"].
(d) Failure of Supplier to Refund Negative-Option Payment
The behavioural element for this offence is committed when a supplier receives a demand for a refund of a negative-option payment and fails to refund it within 15 days [CPA 13(7), CP Reg 21].
This topic is discussed more fully in Ch.5, s.5(c) ["CPA Consumer Rights: Negative-Option Contract Formation: The Unsolicited Consideration Rule"].
(e) Failure of Supplier to Refund Illegal Payment After Demand
The behavioural element for this offence is committed when a supplier who has received a CPA-illegal payment fails to return it to the consumer after the consumer has so demanded by notice [CPA 98(2)].
This topic is discussed more fully in Ch.5, s.4(d): "CPA Consumer Rights: Prices, Estimates and Illegal Charges: Recovery of Illegal Charges".
5. Offences Relating to CPA Civil Remedies
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in Ch.7: "CPA Civil Remedies".
(b) Charging Illegal Assistance Charge
The behavioural elements for this offence is committed when a person "charge(s) a consumer for assisting the consumer to obtain any benefit, right or protection to which the consumer is entitled under this Act, unless, before the consumer agrees to pay the charge, the person discloses the entitlement's existence and direct availability to the consumer and the cost, if any, the consumer would be required to pay for the entitlement if the consumer obtained the entitlement directly" [CPA 12].
This topic is discussed more fully in Ch.7, s.9(f) ["CPA Civil Remedies: Civil Court Remedies for General CPA Rights: Legal Assistance"].
(c) Failure of Supplier On Cancellation of Consumer Agreement to Refund Payments and Return Trade-In or Its Value
The behavioural element for this offence is committed when a supplier, on cancellation of a consumer agreement, fails to refund to the consumer payments made to date, and/or to either return any trade-in property or refund its value [CPA 96(1)].
This topic is discussed more fully in Ch.7, s.4: "CPA Civil Remedies: Restitution by Supplier After Rescission".
(d) Failure by Credit Card Issuer to Process Consumer Refund Demand, and If Necessary, Cancel or Reverse Illegal Payment
The behavioural element for this offence is committed when a credit card issuer fails to process a legitimate consumer notice demanding cancellation or reversal of CPA-illegal charges, and if necessary, to cancel or reverse same [CPA 99(5)].
This topic is discussed more fully in Ch.7, s.8: "CPA Civil Remedies: Cancellation or Reversal of Credit Card Charges".
6. Offences Relating to Unfair Practices
(a) Engaging in an Unfair Practice
The behavioural element for this offence is committed when a person "engage(s) in an unfair practice" [CPA 17(1)].
This large topic, which relates to false, misleading or deceptive, or unconscionable, representations, is discussed more fully in Ch.6 ["CPA Unfair Practices"].
7. Offences Relating to Illegal Internet Gaming Sites
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in the sector-specific chapter entitled "Internet Gambling".
(b) Advertising Illegal Internet Gaming Site
The behavioural element for this offence is committed when a person "advertise(s) an internet gaming site that is operated contrary to the Criminal Code (Canada)" [CPA 13.1(1)].
(c) Facilitating Advertising of Illegal Internet Gaming Site
The behavioural element for this offence is committed when a person, other than an internet service provider, on behalf of another person, arranges for or otherwise facilitates advertising an internet gaming site that is operated contrary to the Criminal Code (Canada) [CPA 13.1(2)].
8. Offences Relating to Personal Development Services
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in the sector-specific chapter entitled "Personal Development Services". Personal development services are a large class of body-related consumer agreements that includes such things as gym memberships, health and fitness training, sports activities, modelling and similar.
(b) Charging Personal Development Services Charges Where Non-Compliant Agreement
The behavioural element for this offence is committed when a supplier requires or accepts a payment from a consumer respecting personal development services, when they do not have a CPA-compliant personal development services consumer agreement with them (most of these will relate to the failure to comply with the disclosure requirments set for such consumer agreement) [CPA 30(2)].
(c) Charging Illegal Initiation Fees Re Personal Development Services
The behavioural element for this offence is committed when a supplier "charge(s) a consumer more than one initiation fee" [CPA 33(a)] or "charge(s) an initiation fee that is greater than twice the annual membership fee" [CPA 33(b)].
(d) Failure to Provide CPA-Compliant Monthly Instalment Plan Re Personal Development Services Consumer Agreement
The behavioural element for this offence is committed when a supplier fails to "make available to consumers at least one plan for instalment payments of membership fees and initiation fees, if applicable, that allow consumers to make equal monthly payments over the term of the personal development services agreement" [CPA 34(1)].
(e) Charging Excessive Instalment Plan Amount Re Personal Development Services Consumer Agreement
The behavioural element for this offence is committed when a supplier fails to "provide an instalment payment plan through which the total amount paid by instalments exceeds the membership or initiation fee, if applicable, by more than 25 per cent" [CPA 34(2)].
(f) Receiving Payment for Unavailable Personal Development Services Except to Trustee
The behavioural element for this offence is committed when a person "receive(s) payment from a consumer for personal development services that are not available at the time the payment is made except if the payment is made through a trust corporation" [CPA 36(1)].
9. Offences Relating to Loan Brokering
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in the sector-specific chapter entitled "Loan Brokering".
(b) Loan Brokering But Failure to Deliver to Consumer CPA-Compliant Consumer Agreement
The behavioural element for this offence is committed when a supplier has a loan brokering agreement with a consumer but fails to properly deliver to them a compliant loan brokering consumer agreement [CPA 49]. Most of these offences will relate to the failure to comply with the disclosure requirments set for such consumer agreements.
(c) Charging Advance Payment Re Loan Brokering
The behavioural element for this offence is committed when a loan broker "require(s) or accept(s) any payment or any security for a payment, directly or indirectly, from or on behalf of a consumer" before "the consumer receives the credit or loan of money that the loan broker has assisted the consumer to obtain" [CPA 50(1)(a)].
(d) Loan Broker Making Prohibited Representation
The behavioural element for this offence is committed when a loan broker makes a prohibited representation to a consumer [CPA 53].
10. Offences Relating to Credit Repair
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in the sector-specific chapter entitled "Credit Repair".
(b) Credit Repair But Failure to Deliver to Consumer CPA-Compliant Consumer Agreement
The behavioural element for this offence is committed when a supplier has a credit repair agreement with someone but fails to properly deliver to them a compliant credit repair consumer agreement [CPA 49]. Most of these offences will relate to the failure to comply with the disclosure requirments set for such consumer agreements.
(c) Charging Advance Payment Re Credit Repair
The behavioural element for this offence is committed when a credit repairer "require(s) or accept(s) any payment or any security for a payment, directly or indirectly, from or on behalf of a consumer" before "the credit repairer causes a material improvement to the consumer report, credit information, file, personal information, credit record, credit history or credit rating of the consumer" [CPA 50(1)(b)].
(d) Credit Repairer Making Prohibited Representation
The behavioural element for this offence is committed when a credit repairer makes a prohibited representation to a consumer [CPA 53].
11. Offences Relating to Motor Vehicle Repair
(a) Overview
The law governing all the offences set out in this section is discussed in greater detail in the sector-specific chapter entitled "Motor Vehicle Repair".
(b) Charging for Motor Vehicle Repair Before Giving CPA-Compliant Estimate
The behavioural element for this offence is committed when a motor vehicle repairer charges a consumer for work or repairs before giving them a CPA-compliant estimate [CPA 56(1)]. There are exceptions to this requirement.
(c) Motor Vehicle Repairer Charging Estimate Fee Without Prior Notice
The behavioural element for this offence is committed when a motor vehicle repairer "charge(s) a fee for an estimate unless the consumer is told in advance that a fee will be charged and the amount of the fee" [CPA 57(1)].
(d) Motor Vehicle Repairer Charging Estimate Fee Where Work or Repairs Authorized and Done
The behavioural element for this offence is committed when a motor vehicle repairer "charge(s) a fee for an estimate if the work or repairs in question are authorized and carried out" [CPA 57(3)].
(e) Motor Vehicle Repairer Charging for Work Done Without Authorization
The behavioural element for this offence is committed when a motor vehicle repairer charges for work or repairs done when the consumer has not authorized the work or repairs [CPA 58(1)].
(f) Motor Vehicle Repairer Charging More Than 10% of Estimate
The behavioural element for this offence is committed when a motor vehicle repairer charges a consumer more than 10% of an estimate given for work or repairs done [CPA 58(2)].
(g) Failure of Motor Vehicle Repairer to Post Signs
The behavioural element for this offence is committed when a motor vehicle repairer fails to post CPA-required signage [CPA 60].
(h) Failure of Motor Vehicle Repairer to Offer to Return Parts and/or to Return Parts
The behavioural element for this offence is committed when a motor vehicle repairer fails to "offer to return to the consumer all parts removed in the course of work or repairs" or to "return all such parts unless advised when the work or repairs are authorized that the consumer does not require their return" [CPA 61(1)]. There are exceptions to this requirement.
(i) Failure of Motor Vehicle Repairer to Properly Keep Separate and/or Return Parts
The behavioural element for this offence is committed when a motor vehicle repairer fails to "keep parts removed from goods being repaired separate from the parts removed from any other goods and, if their return is requested by the consumer, [to] return the parts in a clean container" [CPA 61(2)].
(j) Failure of Motor Vehicle Repairer to Deliver Proper Invoice
The behavioural element for this offence is committed when a motor vehicle repairer fails, on completion of work or repairs, to deliver to the consumer a CPA-compliant invoice [CPA 62]. Most of these offences will relate to failure to comply with information disclosure requirements.
(k) Giving Excessive Estimate or Charging Excessive Cost Because Insurance Company Paying for Work or Repairs
The behavioural element for this offence is committed when a motor vehicle repairer "give(s) an estimate or charge(s) an amount for work or repairs that is greater than that usually given or charged by that repairer for the same work or repairs merely because the cost is to be paid, directly or indirectly, by an insurance company" [CPA 64].
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