#UnitedAirlines: Why Canada Needs Air Passenger Protection Rules Today

Consumer protections for air travel passengers? What a crazy idea! This past week, U.S. air carrier United Airlines had to navigate an embarrassing and offensive incident which resulted from a passenger being physically dragged off a flight from Chicago, Illinois to Louisville, Kentucky to open up seats for other airline employees. The event prompted a public outcry and serious questions about the level of discretion airlines should have over their customers.
In 2015, PIAC recommended the creation of an Airline Code and an Air Passenger Complaints Commissioner in order to protect air travel consumers. (Photo courtesy of the Nigeria Model United Nations Society)
Canadian airline passengers may be asking the same question here, especially as there are few consumer protection rules and no bill of “air passenger rights” in Canada. The United States at the least has had clear and concrete air passenger rights in the case of flight and tarmac delays since 2009. The European Union also has regulations in place to protect air passenger rights in situations such as flight delays, flight cancellations, and lost baggage. In Canada, airlines are permitted to develop their own policies as to how they will treat passengers in cases such as flight delays, overbooking or lost baggage. Where a passenger disagrees with an airline’s remedy, they can complain to the Canadian Transportation Agency to resolve their specific issue, or file a lengthy legal application to challenge the reasonableness of the airline’s policy.

PIAC Calls for an Airline Code and an Air Passenger Complaints Commissioner

However, it is clear this is no longer enough. Canadians need a single standardized set of air passenger rules so they know they are entitled to certain rights in situations where a flying experience does not go smoothly. In 2015, PIAC prepared a report on Consumer Protections for Airline Passengers for the Canada Transportation Act Review Secretariat recommending the creation of an Airline Code and an Air Passenger Complaints Commissioner in order to protect air travel consumers. The Airline Code could include rules on flight delays and cancellations, delayed or lost baggage, overbooking and child passengers. The #UnitedAirlines incident shows what can go terribly wrong when airlines have full discretion to decide how their customers can be treated. All parties, both air carriers and consumers alike, could use a little air traffic control on these issues.

Transport Minister Confirms a Code is Coming – Hold Him to It

On Tuesday, Transport Minister Marc Garneau confirmed the Canadian federal government will introduce new legislation this spring, and the new “air passenger bill of rights” will address situations such as flight bumping. In PIAC’s view, this is the right step for Canadian airline consumers; a mandatory code of air travel rules could not come any sooner. PIAC will be watching for the new rules and advocating for your consumer rights and protections in air travel. We encourage you to contact your local Member of Parliament (M.P.) and the Transport Minister if air travel rights are important to you too.

PIAC believes additional clarity for air passengers is on the horizon. If air travel rights are important to you as well, contact your M.P. or write the Minister of Transport to let them know. (Photo courtesy of Pixabay)

Fixing TV Service Will Keep Complaints Commissioner Busy

OTTAWA – Over the last six months, Canadians made 2,734 complaints about their television services to the Commissioner for Complaints for Telecommunications Services (CCTS). That is more complaints than the CCTS received in relation to wireless, internet, local voice, or long-distance voice services. What makes this particularly surprising is that the CCTS cannot yet address complaints about TV services– it won’t be able to until September 2017, when the “TV Service Provider Code” comes into effect.
With Canada’s communications regulator reporting that it received 3,191 complaints about broadcasting distribution undertakings in a year in its most recent data , it looks like the CCTS will have its hands full bringing TV Service providers up to the standards Canadians expect.[1]
The Public Interest Advocacy Centre (PIAC) fought for the TV Service Provider Code, just as we fought for the Wireless Code before it. These mandatory codes protect consumers and promote competition. Both Codes focus on allowing consumers to make informed choices.
Communications consumers face ongoing problems with communications service providers. These are highlighted in the CCTS mid-term report’s statistics, which outline thousands of complaints made in relation to wireless, internet, local phone, and long-distance services.
 

Top 10 Issues	Complaints Aug 1-Jan 31
Non-disclosure of terms/Misleading information about terms	795
Incorrect Charge	698
Intermittent/Inadequate quality of service	632
Legitimacy and amount of early cancellation fees	477
30-day cancellation policy/Charges billed after cancellation	398
Credit/refund not received	344
Data charges	283
Credit reporting	235
Breach of Contract	232
Material contract change without notice	224

 
The TV Service Provider Code will help to address more of these problems. In short, the Code requires carriers to communicate clearly. More specifically it requires carriers to:
 

1. Clearly explain promotional offers, including how long the promotion will last, the price at the end of the promotion, and any commitment period or cancellation fee;
2. Write contracts and related documents in a way which is clear and easy to read;
3. Clearly itemize all charges, including equipment rental fees, installation fees, and access fees;
4. Provide a permanent copy of the contract setting out specified important terms;
5. Provide a critical information summary summarizing the contract;
6. Provide notice when they are changing prices or packaging of channels, and setting out the customer’s options; and
7. Clearly explain their policies in relation to service outages and disconnection.

We look forward to the CCTS’ assumption of responsibility for the TV Service Provider Code this September.
 
For more information, please contact:
 
Jonathan Bishop
Research & Parliamentary Analyst
Public Interest Advocacy Centre (PIAC)
(613) 562-4002×23
jbishop@piac.ca
 
John Lawford
Executive Director
Public Interest Advocacy Centre
ONE Nicholas Street, Suite 1204
Ottawa, ON K1N 7B7
(613) 562-4002 x25
(613) 447-8125 (cell)
jlawford@piac.ca
http://www.piac.ca
 
[1] http://www.crtc.gc.ca/eng/publications/reports/policymonitoring/2016/cmr3.htm#a3iv

CRTC asked to reconsider affordability subsidy

Lower-income Canadians, fixed income earners and seniors should have access to “basic service” including broadband
OTTAWA, April 5, 2017 – The Public Interest Advocacy Centre (PIAC), ACORN Canada (ACORN) and National Pensioners Federation (NPF) today jointly filed an application to review and vary the Canadian Radio-television and Telecommunications Commission’s (CRTC) “Review of basic telecommunications” decision to reconsider a fund to ensure all Canadians, including lower-income Canadians, have equal access to broadband and other telecommunications services.
“The CRTC missed a crucial opportunity to level the playing field so that all Canadians, regardless of their socio-economic status, can have access to the same standard of internet and telephone service that the CRTC said all must have”, said John Lawford, Executive Director and General Counsel at PIAC. “We must ask, therefore, on behalf of Canada’s least well-off, for the CRTC to use their mandate and authority to create an affordability fund.”
The “affordability funding mechanism” (AFM) proposal was filed with the CRTC in the basic service hearing last year by a coalition named the Affordable Access Coalition, which included PIAC, ACORN and NPF. The AFM would provide low-income Canadians with a monthly subsidy to use on the telecommunications service of their choice (broadband, home phone or cellphone service) and from the service provider of their choice.
“The CRTC found that broadband, like home telephone service, is a ‘basic’ telecommunications service that all Canadians should have access to so that they are able to participate in Canadian society and the digital economy,” said Herb John, President of the NPF. “Therefore Canadian seniors and those on a fixed incomes should not be shut out of these essential services simply because they lack the means to access them,” he added.
Jonethan Brigley, ACORN Canada national board member, added: “The CRTC tossed the hot potato of fair access to broadband to the federal government – but Canada Budget 2017 shows the feds only want to play a supporting role. We need CRTC leadership or there will be no real change.”
A copy of PIAC, ACORN and NPF’s Application to review and vary Telecom Regulatory Policy CRTC 2016-496 can be found on PIAC’s website at www.piac.ca.
For more information please contact:
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 447-8125 (cell)
(613) 562-4002 ×25
lawford@piac.ca
www.piac.ca
 
Herb John
President National Pensioners Federation (NPF)
(519) 350-3221
herb.john@npfmail.ca
nationalpensionersfederation.ca/
 
Judy Duncan
Head Organizer
ACORN Canada (ACORN)
416-461-5322 (office)
416-996-6401 (cell)
canadaacorn@acorncanada.org
www.acorncanada.org

Switching Providers Isn’t All About Reasons: It’s Just Hard.

Written by: Alysia Lau, Legal Counsel at PIAC

Recently, I took the plunge—I switched internet service providers. Although the switching process itself was as smooth as I could have asked for, the inertia and personal resistance to switching I experienced took me by surprise.
I had been with a major Canadian telecommunications provider for several years and had thought about switching for a good number of them. I knew I could probably get a “better deal” with another provider, had suffered very hostile conversations with customer service, and didn’t necessarily agree with the ethos of the company. All good reasons, right? Yet, every time I called, I got talked out of cancelling at that moment. Every single time. So far I have internet access that works, who knows what could happen if I tried to switch? Could I experience an internet blackout for weeks? Why rock the boat? “I’ll do it another time,” I told myself.
Then, a significant event happened earlier this year which highlighted once and for all that my provider wasn’t for me. I could not risk calling customer service to be talked out of my decision again. So, I decided the only way I could definitively switch was by subscribing to a new provider first before breaking up with my old one. It still wasn’t easy. In fact, as hard as it is to admit, I had filled out all my information with my new provider, before quitting the form at the last minute rather than sending it in. Then I told myself to get a grip, manually completed the entire form again, and hit submit.
That was, in effect, the hardest part. As a visit from the technician was scheduled, I called my old provider and spent half an hour trying to cancel as they clung on to me in every possible way: “Is your new internet installed yet?” “Can you cancel your new order?” “Is the technician on their way right now?” “You could get a refund.” “There is still time!” I resisted the entreaties not because I didn’t feel myself becoming slowly entrapped in the spinning thread of appeals and petitions, but because I couldn’t. I was already gone.

—

I have been struck by comments made by high-profile regulators – institutions created to protect the public interest – which have lamented that telecom consumers are in part to blame for their strife and complaints about high prices, low data caps, and throttled broadband speeds. Why don’t consumers just cancel their service and switch providers? Why don’t they try to negotiate with their service providers? Why don’t they do in-depth research into their contracts instead of relying on customer service representatives?
These statements discount an array of reasons which have formed the foundation of today’s consumer protection laws and regulations, including:

• The significant imbalance in bargaining power between companies and individual consumers;
• The traditional “take it or leave it” nature of service terms and contracts;
• The disparity in resources available to a company and to a consumer in cases where “something goes wrong” or a dispute arises;
• The complexity of the telecommunications market and the high cost of information acquisition;
• The effect of high switching costs and barriers such as bundled services and fixed-term contracts; and
• The fact that a market of goods or services rooted in the ability of a consumer to “negotiate” a better contract creates an inequitable system which vastly favours consumers who traditionally have more time, independence, income, knowledge, education, mobility, and confident language skills.

However, regardless of these reasons, and rather than going into the stormy debate about the competitiveness of Canada’s telecom market and coordinated pricing in the wireless sector, I thought I would simply share my own personal anecdote.
What did I learn? Switching is just hard. I am a consumer advocate and was as entangled in the incumbent web as anyone else. It is not merely a matter of being at the mercy of any penalties your old telecom provider may impose on you, or having to pay upfront for a new modem and installation costs, although all these things matter—inertia and fear are true consumer barriers. It’s a matter of being human, and companies know exactly how to take advantage of it.
Consumer inertia has been the study of behavioural economists, business administrators, psychologists and other researchers for decades. While various models have been created to predict consumer willingness to switch, the basic conclusions made by researchers have widely resonated with one another. Notably, following the liberalization of markets which were formerly dominated by monopolies, economists expected consumers to actively seek out and switch to the best companies. This would, in effect, theoretically lower prices and increase service quality overall. Yet, while this has happened to a certain degree, consumer behaviour has not met the original expectations of creating highly competitive markets; in fact, the majority of consumers, even when offered the option, regularly choose to stay with their incumbent provider.
While there have been several explanations for this, I will only focus on a few here.[1] To begin, the telecommunications market is unique not merely because of the fast-paced changes in technology but also because consumers must make complex decisions related to several different products and services at the same time. Thus, instead of deciding which brand of dish detergent to buy, a consumer is considering equipment, wireless modems, broadband speeds, data allowances, rental or purchase options, and so on. Moreover, a consumer must make a value judgment of a telecom service based on forecast usage even though there is a great deal of uncertainty as to how the service will actually be used by the consumer or by their dependants. This is because usage of communications services is influenced by, and can vary significantly based on, circumstance, experience, relationships, and day-to-day interactions and events. Studies have shown that not only are consumers reluctant to switch, but when they do, particularly in electricity or telecom markets, they end up subscribing to “sub-optimal contracts”—many end up paying more than they need to for their actual usage.
Moreover, researchers have identified various consumer behaviours which affect willingness to switch and which are exacerbated in markets such as telecom where the “consumer surplus” – or net gains a consumer would make by switching – are difficult to visualize in the present moment. For instance, the “endowment effect” describes the phenomenon that individuals tend to value a good already owned more than the same good not yet owned. Similarly, the “loss aversion” theory arises from findings that consumers tend to assign twice as much “weight” to giving up a good than to gaining that exact same good. According to Lunn, in the telecom sector this means that “consumers may be foregoing substantial gains, because alternative providers would need to provide several times the consumer surplus of the current contract before consumers would be willing to switch.”[2] Ultimately, incumbent companies tend to have the strong brand advantage.
So, what is my message to regulators? Consumers need all the help they can get, particularly in a highly technical sector that is challenging for the average customer to understand. After you have done all that you can to empower them, then give consumers time – time to adjust, to reconsider, to adapt – and give credit to those who did make the change. When was the last time you switched your telecom provider?

—

By the way, I am now the happy customer of a small, local non-profit ISP. My monthly cost is lower, my broadband speeds and data caps are higher, and I just feel good about the provider I’m supporting. So pluck up your courage, and if you believe it’s right – make the switch. It’s worth it.
 

[1] This research is derived from a number of sources, including:

Arthur Fishman & Rafael Rob, “Consumer Inertia, Firm Growth and Industry Dynamics” (2002), PIER Working Paper 02-034, online: SSRN;

Ali Hortaçsu, Seyed Ali Madanizadeh & Steven L. Puller, “Power to Choose? An Analysis of Consumer Inertia in the Residential Electricity Market” (2015), National Bureau of Economic Research Working Paper 20988;

Anja Lambrecht & Bernd Skiera, “Paying Too Much and Being Happy About It: Existence, Causes, and Consequences of Tariff-Choice Biases” (2006) 43 J of Marketing Research 212;

Pete Lunn, “Telecommunications Consumers: A Behavioural Economic Analysis” (2011), Working Paper No. 417, online: ESRI;

Nitin Mehta, Surendra Rajiv & Kannan Srinivasan, Active Versus Passive Loyalty: A Structural Model of Consideration Set Formation (2001), online;

Jeffrey T. Prince, Relating Inertia and Experience in Technology Markets: An Analysis of Households’ Personal Computer Choices (2010), online: SSRN; and

Patrick Xavier, Behavioural Economics and Customer Complaints in Communication Markets: A report prepared for the Australian Communications and Media Authority (ACMA) in connection with the public inquiry “Reconnecting the Customer” (Canberra: Australian Communications and Media Authority, 2011), online: ACMA.

[2] Lunn, ibid. at p. 10.

Canada Budget 2017: Low-Income Internet Support a "Cruel Joke"

OTTAWA – The Public Interest Advocacy Centre (PIAC) today decried the federal government’s Budget 2017, Building a Strong Middle Class, as providing only $13.2 million over 5 years to support low-income Canadians’ access to broadband – an amount over 100 times lower than suggested by PIAC and other public interest groups in evidence presented last year to the Canadian Radio-television and Telecommunications Commission (CRTC).
“This Budget is a cruel joke for low-income Canadians struggling to afford broadband internet for education, health, employment and other key services,” said John Lawford, Executive Director and General Counsel of PIAC. “Acknowledging such a fundamental problem with a token amount and having the gall to call it an ‘Affordable Access program’  is insulting,” he added.
PIAC intends to continue its work advocating for affordable broadband access for all Canadians – a message it recently took, with the help of Consumers International, to preparatory meetings of the G20 digitalization ministers in Germany.
The CRTC recently rejected taking a role in solving this problem and instead called upon the federal, provincial, municipal, and first nations governments of Canada, along with internet service providers and community support groups, to address affordability of broadband for low-income Canadians.
 
For more information:
John Lawford
Executive Director and General Counsel, PIAC
Tel: 1-613-562-4002 ext. 25
Cell: 1-613-447-8125
jlawford@piac.ca
 
— 30 —
 

The Need Remains for a Financial Consumer Code

In 2014, PIAC submitted an analysis to Finance Canada calling for a comprehensive financial consumer code, as well as the establishment of an ombudsman to address consumer complaints arising under a financial consumer code. We suggested the present Ombudsman for Banking Services and Investments (OBSI) could perform the day-to-day intake of complaints based on the Code, mediate and suggest resolutions to the financial institutions, leaving Financial Consumer Agency of Canada’s (FCAC) role as supervisory, exercising an oversight, systemic enforcement and policy role.

Canadians need a comprehensive financial consumer code and an ombudsman to address consumer complaints arising under such a code.

The financial consumer code, as PIAC envisioned, would be binding upon financial institutions subject to federal Government authority and have the force of law. At the time, we reasoned that “in the absence of a clear, simple to understand standard, consumers – and notably vulnerable consumers – stand at a significant disadvantage when dealing with financial institutions and their employees or representatives.”
As allegations about aggressive sales tactics by TD Bank employees comes to light,[1] PIAC reviewed its 2014 submission. We found the need remains for the creation of a document consumers can point to that outlines clear rules of road for federally regulated financial institutions and consumers.
However, having clear rules is only one piece of the puzzle. Once a document is created, Canadians will expect to have a champion to defend the contents of a financial consumer code. An effective body to adjudicate their concerns, and make public those instances where banks behave badly. On this score, the available evidence suggests the current enforcement approach towards banks in Canada is akin to having referees without whistles.

“the current enforcement approach towards banks in Canada is akin to having referees without whistles.”

In 2014, PIAC expressed concern with the communications approach of the FCAC towards enforcement and compliance issues involving federally regulated financial institutions. We noted the FCAC “is not sufficiently focused upon informing the public” and that “generally, an announcement involving the violation of an act under the authority of the FCAC is posted on the FCAC website. FCAC rarely holds a press conference or communicates directly to the public explaining what occurred that was in violation of an existing statute or regulation.”
Since 2014, PIAC contends the FCAC’s approach to making public any enforcement activity has not changed. It is difficult to recall the last occasion when a federally regulated financial institution was publicly named by the FCAC to be in violation of a statute under its purview. Even in the face of a series of alleged wrong-doings by a leading Canadian financial institution, there have only been e-mail statements by spokespersons. No public statement by the FCAC Commissioner to our knowledge thus far.
Meanwhile, the head of OBSI urged consumers who have encountered such banking issues to file a complaint with their financial institution.
“Financial institutions have 90 days to deal with it, but if they’re still unsatisfied then that’s where OBSI comes in,” Sarah Bradley said. “We’re here to help them resolve those disputes.”[2]
OBSI is an impartial arbitrator to resolve disputes between banks or investment firms and their clients. However, the OBSI is not used as a dispute arbitrator by TD. TD was allowed to move these services to another arbitrator called ADR Chambers Banking Ombuds Office in 2011.
This confusing morass of who is responsible for what complaints is not what Canadians will expect if a financial consumer code is introduced. Canadians will expect a “consumer protection czar” who not only accepts the mantle, but uses it to publicly defend the interests of Canadians when banks behave badly.  
Enter the federal Minister of Finance. PIAC believes Finance Minister Morneau has an opportunity to enhance consumer confidence in the banking sector by introducing the establishment of comprehensive financial consumer code, and a single ombudsman to address consumer complaints arising under such a code. PIAC encourages the Minister to conduct the actions required to make the Financial Consumer Code and the applicable consumer redress regime a reality.
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. He was part of a team that authored PIAC’s 2014 submission to Finance Canada’s Consultation on Canada’s Financial Consumer Protection Framework: Consultation Paper. That submission can be viewed here. 
 
[1]Posadzki, A. “Banking ombudsman says TD Bank allegations raises ‘serious concerns’”, Toronto Star, March 13, 2017. See also, Erica Johnson, “’We do it because our jobs are at stake’: TD bank employees admit to breaking the law for fear of being fired,” CBC News, March 10, 2017. Online: <http://www.cbc.ca/news/business/td-bank-employees-admit-to-breaking-law-1.4016569>, and Erica Johnson, “’I will do anything I can to make my goal’: TD teller says customers pay price for ‘unrealistic’ sales targets,” CBC News, March 6, 2017. Online: <http://www.cbc.ca/news/canada/british-columbia/td-tellers-desperate-to-meet-increasing-sales-goals-1.4006743>.
[2] [2]Posadzki, A. “Banking ombudsman says TD Bank allegations raises ‘serious concerns’”, Toronto Star, March 13, 2017.

BCE -MTS merger approval by Competition Bureau experiments with Manitoba consumers: price increases, more consolidation expected

OTTAWA, February 15, 2017 – The Public Interest Advocacy Centre (PIAC) and the Consumers’ Association of Canada (CAC) reacted to a consent order filed with the Competition Tribunal today by The Commissioner of Competition, BCE Inc (Bell), and Xplornet Communications Inc. (Xplornet) permitting the acquisition of Manitoba Telecom Services Inc. (MTS) by BCE, subject to certain divestitures and conditions.
“Manitoba consumers are the guinea pigs in this cellphone market experiment,” said John Lawford, Executive Director and General Counsel at PIAC. “There are no guarantees that wireless prices will not rise in Manitoba due to this deal’s approval despite the artificial creation of a tiny new competitor in Xplornet”, he added.
The Commissioner of Competition explained in a press release and statement regarding the acquisition that the “Proposed Transaction would likely lead to a substantial increase in the price for mobile wireless plans due to the increased ability and incentive for a coordinated exercise of market power between Bell, TELUS and Rogers in Manitoba.”
However, despite this finding and the rejection of Bell’s contention that the transaction should be approved due to increased “efficiencies”, the Competition Bureau stated that its concerns about competition in Manitoba were satisfied by the deal in the Consent Order. The order requires Bell to divest to Xplornet certain MTS spectrum, certain MTS customers and stores and to provide access to MTS towers among other conditions, in order for Xplornet to offer a new retail wireless retail business in Manitoba.
“We’re not quite sure what it takes to get a merger stopped in Canada anymore,” said Bruce Cran, President of the Consumers’ Association of Canada, which opposed the deal alongside PIAC. “We are particularly concerned about the possible move to more consolidation in the wireless market across Canada after this deal.”
PIAC, on behalf of the Consumers’ Association of Canada, and the Public Interest Law Centre (Manitoba), on behalf of the Manitoba branch of the Consumers’ Association of Canada, released a poll in June 2016 of Manitobans showing high levels of concern with the proposed takeover.
For more information please contact:
John Lawford
Executive Director & General Counsel
Public Interest Advocacy Centre (PIAC)
(613) 562-4002 ×25
lawford@piac.ca
http://www.piac.ca/
 
Bruce Cran
Consumers’ Association of Canada
(604) 418-8359
bcranbiz@telus.net
http://www.consumer.ca

Next Steps on the Loyalty Points Story

During the last six months of 2016, there was much discussion about the plan by Air Miles to let miles five years or older expire starting January 1, 2017. However, in December, the Ontario Legislature passed Bill 47, Protecting Rewards Points Act, prohibiting the expiry dates on reward points programs based on time alone in Ontario. This led many to conclude this story is over. However, for consumers, and especially those Canadians with loyalty point balances, what happens next may be just as important as the passage of the bill.
                                         
So What Happens Next?
The Government of Ontario plans to consult with the public and businesses to develop regulations aimed at protecting consumers’ points while maintaining the viability of rewards programs. No details have been announced regarding the timing or the format of this consultation process.

Photo courtesy of Steve Buissinne
 
Why is This Important? Three Words: The Fine Print
Just like the terms and conditions of your loyalty program membership agreement, the fine print of Bill 47 had unexpected surprises for Ontario consumers. The bill amends the Ontario Consumer Protection Act to allow the Lieutenant Governor in Council (i.e. Cabinet) to make regulations “governing the transfer of rewards points among consumers, including upon death.”
What does this mean? Currently, policies regarding the transfer of loyalty points are determined by loyalty program providers. Some loyalty programs, such as the Shoppers Optimum Program, allow the transfer of points between members free of charge. Others, such as Aeroplan and WestJet Rewards, charge a fee to transfer, while several programs prohibit the transfer of points altogether.

Loyalty program providers appear to hold all the cards when it comes to terms and conditions of their programs (Photo courtesy of Piotr Lohunko)
A similar potpourri of policies apply upon the death of a loyalty program member. Some loyalty programs allow the transfer of points to a loved one while others simply close the account. The bottom line is these policies are largely dictated to consumers by loyalty program providers. However, the impending consultation and the creation of regulations by the Government of Ontario may change that. This could benefit Ontario consumers in particular and by extension consumers across Canada.
 
PIAC’s Position?
In 2013, in a report entitled, “Customer Loyalty Programs: Are Rules Needed?”, PIAC discovered there were a number of consumer irritants associated with loyalty programs. PIAC concluded that industry-wide guidelines were required relating to loyalty currency transfers and bequeathal. Moreover, PIAC called for the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs.
As a result of the Bill 47, the Ontario Ministry of Government and Consumer Services may have just become the loyalty program complaints body that PIAC requested. In addition, any future regulations regarding the transfer and bequeathal of loyalty points may answer PIAC’s call for industry-wide guidelines.
 
What’s the Catch?
The catch is that the Government of Ontario is not legally compelled to do anything. The relevant clause of the Ontario Consumer Protection Act amended by Bill 47 states the Lieutenant Governor in Council (i.e. Cabinet) may make regulations regarding the transfer and bequeathal of loyalty points. While it certainly appears the Ministry of Government and Consumers Services intends to create regulations, the Ministry could theoretically walk away from this exercise at any time.
 
Photo courtesy of Negative Space
 
What Can Consumers Do?
PIAC believes all loyalty programs should operate under the same rules regarding the transfer and bequeathal of loyalty points. Whether or not you agree with this statement, the Government of Ontario is providing a ground-breaking opportunity for consumers to comment on loyalty program policies with the potential to make them better for consumers. As a result, consumers can bring any loyalty program issue they feel is important before the Ministry of Government and Consumers Affairs or your Member of Provincial Parliament (M.P.P.) for their consideration.
PIAC encourages Ontarians and all Canadians to send a message to the Government of Ontario expressing the need for new regulations on loyalty currency transfers and bequeathal. In addition, PIAC believes the Government of Ontario should further examine those loyalty program issues identified by consumers during this consultation process.

• The Ontario Ministry of Government and Consumers Services can be reached by clicking here.
• Here is a list of Members of Provincial Parliament

Make sure the Government of Ontario follows through on its plan to consult and to develop regulations aimed at protecting consumers’ loyalty points.
 
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. He is the author of PIAC’s 2013 study of customer loyalty programs in Canada entitled, “Customer Loyalty Programs: Are Rules Needed? The report noted consumers have little recourse when loyalty program providers unilaterally decide to devalue their loyalty currency, or change other terms and conditions of loyalty programs. PIAC advocated for industry-wide guidelines relating to loyalty currency devaluation, transfers and bequeathal. Moreover, the report called for the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs, as well as guidelines for the notice given to changes in loyalty program terms and conditions.

Popping the Hood: Car Stress Suggestions

Note: This post is for information purposed only and does not constitute legal advice. If you require legal advice, please contact a lawyer. You may wish to consult legal reference resources such as the Law Society of Upper Canada’s Lawyer Referral Service, Community Legal Education Ontario (CLEO), or the Canadian Bar Association’s list of Pro Bono Legal Resources in Canada.
Here at PIAC, we often receive emails and letters about consumer advocacy on a variety of subjects, some outside the scope of our expertise. Over the past few months, Canadian consumers have written us repeatedly regarding various struggles they have encountered regarding automobile ownership. According to Statistics Canada, over 11 million Canadians depend on their vehicle to get to and from work. As a result, we’re pleased to offer a few resources for those experiencing car troubles.

Photo Courtesy of Ryan McGuire
Step 1: Talk to your dealer. In most cases, consumers have already taken this step. However, it is worth inquiring since the source of your problem may have already been identified by your vehicle manufacturer or dealer. In addition, your issue may already be the subject of a recall or other remedy. You can search for vehicle recalls using Transport Canada’s Motor Vehicle Safety Recalls Database or consult Transport Canada’s Motor Vehicle Safety Directorate for other safety issues.
Step 2: If your concern remains unresolved after discussing it with your dealer, you may approach the organization that regulates the sale of motor vehicles in your province or territory. Usually, this is a vehicle industry council, such as the Alberta Motor Vehicle Industry Council (AMVIC), the Motor Vehicle Sales Authority of British Columbia or the Ontario Motor Vehicle Industry Council (OMVIC). In many instances, these organizations will investigate your concerns and offer a dispute resolution service.
Step 3: If the complaint remains in dispute after consulting the regulator, you may consider contacting the Canadian Motor Vehicle Arbitration Plan (CAMVAP). CAMVAP is a program for disputes between consumers and vehicle manufacturers. Alleged manufacturing defects or implementation of the manufacturers’ new vehicle warranty can be put before a neutral third party (arbitrator) for resolution. To reach CAMVAP, visit their website or call 1-800-207-0685.

Photo Courtesy of Evan Kirby
Consult An Experienced Honest Broker: At any point during this process, you may also consult an organization with expertise in the automotive sector from the consumer perspective, such as the Automobile Protection Association (APA). The APA disseminates information about automobile defects, advocates for improved automobile safety standards and promotes consumer information about the automotive industry in Canada. The APA routinely appears as a media commentator, and collaborates frequently with news programs such as CTV’s W5 to raise awareness on automotive issues. More information can be found on the APA website, or by calling 416-204-1444

Photo Courtesy of Burak Kebapci
PIAC hopes the vast majority of Canadian automobile owners never require this information. However, if you do experience car troubles, the resources listed here may help fix your problem and get you back on the road.
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. He has authored or co-authored numerous research studies from the consumer perspective on a range of issues including international wireless data roaming, customer loyalty programs and air passenger rights. He can be reached at jbishop@piac.ca.

What Can Air Miles do with all those Expiring Miles?

In December 2011, Air Miles announced going forward its reward miles will only be valid for 5 years. As a result, after December 31, 2016, Air Miles older than five years begin to expire on a quarterly basis. Air Miles spokesperson have repeatedly noted some collectors are “still not using the miles they collected decades ago” and “believe five years is very reasonable to expect someone to use miles and get a reward that betters the way they live their lives every day.”
The expiry information has been provided on the Frequently Asked Questions section of the Air Miles website. However, the CBC has concluded Air Miles may not have distributed any public follow-up announcements since 2011 or any warning messages to its customers.
Regardless, word has gotten out to enough Air Miles members to apparently generate problems for Air Miles and consumers. Media outlets have recently commented on frustrations experienced by Air Miles members trying to redeem their older Air Miles for fear of losing them. Phone wait times have reportedly been 2 hours or more. Air Miles notes many rewards options are redeemable online. However, items such as vacation package deals must be booked by phone. Thus consumers wanting to spend their hard-earned Air Miles on that dream vacation or a trip to see family have little choice but to stay on hold or attempt requesting a callback by Air Miles staff.
 
Redemption Spike Could Have Been Foreseen
Air Miles could have anticipated this spike in redemption demand based on a previous experience by Aeroplan. In the late 2000’s, Aeroplan instituted a policy where loyalty points more than 7 years old were to begin expiring on January 1, 2014. In 2013, an annual North American seat reward availability survey noted the availability of flights through Aeroplan took a dramatic dive in 2013 when compared to previous years. A reasonable person could conclude the reduced availability of Aeroplan reward flights were a response to the approaching point expiry deadline.
About 6 months before points initially expired Aeroplan canceled the expiration policy. However, it appears Air Miles is not willing to follow suit. This leaves Air Miles in a quandary. A program designed to keep customers happy and have them spend on products and services is now irritating some of their members by:

• Taking some of their loyalty currency away
• Making the redemption process a less than pleasant experience

PIAC contends the redemption process is critical for both consumers and loyalty program providers – a positive redemption of loyalty points may lead customers to become brand advocates for the program. A negative redemption process leaves consumers alienated, which is the risk Air Miles increasing faces as its points expiration policy inches closer to reality.
 
How Can Air Miles Respond?
A simple yet effective response would be for Air Miles to simply employ more staff at their call centre to address the excess demand. Air Miles could follow the lead of Aeroplan by cancelling the expiry policy before it takes effect December 31, 2016. However, assuming Air Miles remains committed to having their miles expire, here are a couple of suggestions to remove some of the public relations sting out of the collective frustration experienced by their Canadian customers. Air Miles stands to gain by having millions of Air Miles expire each year going forward. Each expiring Air Mile represents an outstanding liability removed from its books. In response, Air Miles could take a percentage of expiring Air Miles and donate them to any number of the thousands of registered charities operating in Canada. Alternatively, Air Miles could establish an “Air Miles Charity Bank” where organizations could submit short applications for Air Miles to further their charitable activities, fueled by expired Air Miles.
These suggestions allow Air Miles to create new beginnings out of a story that so far has only grown a bumper crop of consumer frustration.
 
Jonathan Bishop has been a Research Analyst with the Public Interest Advocacy Centre (PIAC) since 2012. 
PIAC explored the operation of customer loyalty programs in Canada in 2013, noting consumers have little recourse when loyalty program providers unilaterally decide to devalue their loyalty currency, or change other terms and conditions of loyalty programs. PIAC advocated for industry-wide guidelines relating to loyalty currency devaluation, transfers and bequeathal. Moreover, the report entitled, “Customer Loyalty Programs: Are Rules Needed?”, called for the creation of a complaints body for consumers on issues that arise relating to the operation of loyalty programs, as well as guidelines for the notice given to changes in loyalty program terms and conditions.