What Counts as an Unfair Practice
Part III of the Consumer Protection Act, 2002 prohibits suppliers from engaging in unfair practices. The Act identifies three categories: false, misleading, or deceptive representations; unconscionable representations; and making representations where the supplier knows the consumer is unable to receive a material benefit from the agreement.
Representations include statements, visual depictions, and material omissions. A representation does not need to be intentionally fraudulent to be unfair, an honest but misleading statement may still give rise to a remedy.
- Misrepresenting the sponsorship, approval, or certification of goods
- Falsely stating that a repair or service is needed
- Using high-pressure tactics against a consumer who is unable to understand the agreement
- Charging a price that grossly exceeds the price of similar goods
- Omitting material information that would influence the decision to purchase
The Remedy of Rescission
Where a consumer enters a consumer agreement after an unfair practice, section 18 of the CPA allows the consumer to rescind the agreement within one year of entering it. Rescission undoes the contract: the consumer returns the goods (if practicable) and the supplier returns the full amount paid.
In addition to rescission, the consumer may recover damages for any loss caused by the unfair practice. Where rescission is no longer practicable, the court may order the supplier to pay the difference between the amount paid and the actual value of the goods or services received.
Real Example: Misrepresented Used Car
A consumer purchases a used vehicle from a registered Ontario dealer. The dealer represents that the vehicle has never been in a significant accident. A subsequent inspection reveals that the vehicle was previously written off and rebuilt.
The representation was material and false. The consumer may rescind the agreement within one year under CPA s. 18 and recover the purchase price. If the dealer was registered under the Motor Vehicle Dealers Act, 2002, a complaint may also be filed with OMVIC, and the Motor Vehicle Dealers Compensation Fund may be available if the dealer is insolvent.
Options When Facing an Unfair Practice
Documenting the representation is critical: save emails, advertising, photographs, and notes of verbal statements. A written notice of rescission should be sent to the supplier, identifying the agreement and stating that the consumer is rescinding under the Consumer Protection Act, 2002.
A complaint may also be filed with Consumer Protection Ontario or the Competition Bureau, depending on the nature of the representation. For private recovery, a Small Claims Court action may be commenced within one year of entering the agreement.