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Public Interest News: Globalive / Net throttling / 10 pillars of consumer protection / Quebec Consumer Protection Act / Ontario Consumer Services ministry

CRTC to fast-track its review of Globalive

(PIAC 23/07/09) The CRTC will examine Globalive’s finances Sept. 22-23 with a decision in 30 days, the Canadian Press reported on July 21. In 2008 the company paid the federal government $442 million for wireless spectrum with the idea of launching the beginnings of its cell phone network by the end of the year.

In submissions Telus, Shaw, Bell and Rogers argued for public hearings while PIAC said hearings would be unnecessary and would delay the arrival of new competition. PIAC noted an ownership review of Globalive took place under Industry Canada in March. The CRTC decision to hold fast-track hearings splits the difference.

CBC News reported on July 21: “PIAC also said in its submission that adding another layer of bureaucracy for companies with some foreign ownership goes against the spirit of the government’s stated goal for the auction to increase competition. A 2006 Telecommunications Policy Review Panel report argued loosening restrictions on foreign ownership would act to increase competition.”

Frais abusifs sur des cartes de crédit

(PIAC 23/07/09) « Les grandes banques canadiennes et la Fédération des caisses Desjardins en appellent du jugement de la Cour supérieure du Québec qui, le 11 juin dernier, dans le cadre d’un recours collectif, les a condamnées à dédommager les consommateurs pour des frais abusifs imposés sur leurs cartes de crédit entre 2000 et 2007 » La Presse Canadienne a rapporté le 21 juillet 2009,

« Ce jugement les condamnait à verser aux consommateurs près de 200 millions $ de frais illégaux pour des transactions en devises étrangères effectuées par carte de crédit. L’organisme Option Consommateurs, qui n’est pas surpris de la procédure d’appel, aurait tout de même espéré que les institutions n’utilisent pas abusivement les tribunaux pour un affrontement perdu d’avance, selon son porte-parole, Michel Arnold » La Presse Canadienne a rapporté.

Dans sa décision, le juge Gascon a donné raison à Réal Marcotte, le consommateur représentant le recours collectif. Il reprochait aux institutions de ne pas respecter le délai de grâce de 21 jours imposé par la Loi sur la protection du consommateur pour les frais de crédit. De plus, il affirmait qu’elles avaient dissimulé des frais de conversion, variant de 1,8 à 2,5 pour cent, dans le taux de change des devises, en violation de la loi provinciale » La Presse Canadienne a rapporté.

Don’t throttle the net, consumers say

(PIAC 23/07/09) “’There will be abuse, privacy violations and price discrimination,’ John Lawford, counsel at the Public Interest Advocacy Centre, told a CRTC panel in Gatineau, Que. A better approach, he said, is to charge subscribers based on how much bandwidth they use, regardless of the application. While Lawford acknowledged that there is a role for DPI when it comes to ferreting out spam or harmful viruses, he said the burden of proof should be on the ISPs to show that such techniques are necessary when it comes to traffic management,” the Toronto Star reported on July 7.

“Bell and the other ISPs shouldn’t be able to declare a perpetual state of emergency when it lies in their power to build more capacity to meet demand,” the Star’s Chris Sorensen quoted Lawford. The Canadian Press reported: Lawford “questioned whether providers are using high-bandwidth peer-to-peer file sharing as a scapegoat for their failure to expand networks to meet demand. Peer-to-peer is used to distribute large files, including software, academic files, movies, television programs and music, from computer to computer over the Internet,” CP’s Julian Beltrame reported.

The Financial Post quoted the PIAC counsel: “People’s internet traffic is just like their telephone traffic,” … “They expect it to go through without being slowed or garbled or anything else … if you let them [ISPs], for whatever stated reason, try to control that message you’re trying to get through, bad things will happen. And if they haven’t happened yet, they will and that would be privacy violations and eventually they’ll start raising prices based on what you do on the internet,” the Post’s Matt Hartley reported on July 7.

Consumer protection better in Europe: PIAC Report

(PIAC 23/07/09) On July 3 the Public Interest Advocacy Centre released a report comparing consumer protection in Canada with the regime provided by the European Commission. The report—Consumer Protection in Canada and the European Union: A Comparison—is a study of the different approaches to protecting consumers in Canadian and European jurisdictions. It uses the EU’s “Ten Principles of Consumer Protection” as its benchmark.

The chief finding of the report is Canada’s consumer protection laws and regulations are, in general, far less comprehensive than those of the European Union in a number of wide ranging areas including food labeling, ecommerce, airline transportation, and telecommunications. Michael Janigan, executive director and general counsel of the Public Interest Advocacy Centre said the differences were not simply the result of differing economic conditions.

Janigan said: “Our conclusion is the reason consumers are better protected in Europe in many key consumer transactions is that policymakers place consumers at the centre of any considerations when making market place rules. In Canada, looking after consumer interests is an afterthought. For example, we haven’t had a consumer affairs ministry in over 16 years at the federal level.”

The report was made possible by a grant from the European Community through its External Relations program. The Report and an Executive Summary are at www.piac.ca.

Blakes: Quebec bill would give more power to groups like Option Consommateurs

(PIAC 23/07/09) On June 16 Quebec unveiled Bill 60 to amend the Consumer Protection Act. Press coverage focused on the impact on cell phone, internet and other service agreements that qualify as ‘contracts involving sequential performance for a service provided at a distance’, blakes.com reported on June 24.

“However, many of the proposed amendments contained in Bill 60 actually apply to businesses that operate in a variety of sectors, including those involved in financial services. The most significant amendments for financial service providers are those respecting prepaid cards, certain types of contractual clauses, and enforcement,” blakes.com reported.

“Bill 60 also widens the power to apply for an injunction to consumer advocacy bodies (e.g., Option Consommateurs). Failure to comply with an injunction obtained by the President or a consumer advocacy body may lead to a motion for contempt of court. The recourse to an injunction will greatly increase the enforcement powers available to the OPC and consumer advocacy bodies,” Annick Demers & Bryna Brodt wrote for blakes.com.

PIAC hails new Ontario Consumer Services ministry

(PIAC 23/07/09) Public Interest Advocacy Centre (PIAC) applauded the June 24 creation of the Ontario Consumer Services ministry, formerly part of a portfolio that included small business. “This is important recognition that ordinary Ontario families need their own advocate at the Cabinet table who will make sure that they get a fair deal in the marketplace,” said Michael Janigan, PIAC’s executive director and general counsel. Janigan praised Ontario’s leadership in elevating the status of consumer affairs and said he looked forward to working with a minister whose sole focus will be bettering economic conditions for consumers.

“Governments of all stripes are starting to realize that markets need rules, and also require protection for those whose pocketbooks may not be big enough to get the best deal from suppliers. An important first step in this process of reform is to recognize that consumer affairs is important enough to warrant its own cabinet position to ensure proper representation. We hope that other first ministers will follow Premier McGuinty’s example.”

Ted McMeekin, M.P.P. for Ancaster–Dundas-Flamborough was today (June 24) named the new Minister of Consumer Services as part of a cabinet shuffle announced by the Premier.

PIAC seeks volunteers: Help us represent consumers

(PIAC 23/07/09) PIAC is frequently asked to participate in industry, government or standards-making committees that must determine the appropriate policy and operational approach to consumer issues that arise in the context of the various important public services, industries and market functions that PIAC attempts to cover. Sometimes, we simply do not have the time and resources to participate in these committees or public consultations. It would be helpful if we knew of individuals with experience in issues of consumer protection or government regulation that could assist in providing the appropriate feedback on behalf of ordinary consumers in the policy making process.

If you are interested, please send us an email at piac@piac.ca telling us what issues you are interested and/or experienced in, your availability for volunteer service and a brief description of the basis for your interest/experience in the area. Please note, that you may not be immediately contacted for a task when you send an email. We will, however, have your expression of interest on file to be accessed when an appropriate request for input comes up that PIAC staff cannot fulfil.

PIAC says basic TV should be accessible: Minister says tough luck

(PIAC 17/06/09) “Many Canadians will get snowed in with digital TV transition slated for 2011 … Heritage Minister James Moore is adamant the government will not step in. ‘I think the transition to digital is important. It’s coming. It’s a fact. But I’ve made it clear a number of times in public that it is not the role of government to finance the transition to digital,’ the Canadian Press reported on May 21.

“About nine per cent of Canadians don’t get their TV through cable or satellite dish, and most of them live in big cities or border towns where over-the-air signals are clear and plentiful. … In the United States, where the transition to digital [took place] on June 13, the federal government gave citizens a US$40 coupon to help buy a converter for their older TVs.

“There’s no such program in Canada. … The networks and the big cable companies, through a working group, have proposed a “hybrid” solution, where Canadians who are left without TV signals when transmitters are shut down will be served by either cable or satellite companies. But that means incurring a monthly fee they never had before. The change will disproportionately affect lower-income Canadians, says Michael Janigan of the Public Interest Advocacy Centre. The organization is pushing government to regulate a new basic-cable package at a vastly reduced fee.”

CP’s Jennifer Ditchburn quoted Janigan: “If we are pouring large amounts of money into producing programming and broadcasting facilities associated with television services, it seems to be not inappropriate to suggest these services should be affordable and accessible by all Canadians.”

Les Canadiens financent leur consommation avec de l’argent qu’ils n’ont pas gagné

(PIAC 17/06/09) « Dans une étude dévoilée hier, l’Association des comptables généraux accrédités du Canada (CGA-Canada) dresse un portrait sombre de l’état des finances des ménages au pays: ils sont plus que jamais endettés et ils utilisent de plus en plus le crédit pour leurs dépenses courantes. Tant et si bien que l’endettement total des ménages a atteint un sommet de 1300 milliards de dollars à la fin de 2008. Cela représente près de 40 000$ par habitant, soit près du double par rapport à l’an 2000 » La Presse Affaires a rapporté le 27 mai.

« Cette étude vient mettre des chiffres sur quelque chose que l’on remarque depuis plusieurs années», souligne Karine Robillard, avocate et conseillère budgétaire chez Option consommateurs.

« Les cartes et les marges de crédit sont la première dette des consommateurs canadiens, et 85% d’entre eux ont une dette active de carte de crédit (c’est-à-dire qu’ils ne paient pas la totalité de leur solde) » Hugo Fontaine a rapporté.

PIAC says net throttling decision based on errors in law and fact

(PIAC 17/06/09) “Canadian Internet Service Providers continue to battle what they say are attempts to undermine fair competition in the country’s telecom industry. And they say the Canadian Radio-television and Telecommunications Commission (CRTC) “erred in law and in fact” in its decision about Internet throttling,” Mediacaster reported on June 8.

More than 10 telecommunication service providers have joined the Canadian Association of Internet Providers (CAIP) in the past six months, and have signed on to a petition calling for the CRTC to rescind its November 2008 decision that allowed Bell Canada to continue to throttle Internet users traffic.

The coalition asserts in a 66-page document that the CRTC based its decision on factual and legal errors and the decision undermines the public interest in a competitive Internet access services market. “While the issues have always been critical, the attacks on fair competition and mandated access to telecommunications infrastructure on a wholesale basis are coming more frequently and with great voracity than ever,” Tom Copeland, Chair of CAIP told Mediacaster.

The brief was written by PIAC counsel John Lawford with the assistance of Janet Lo and is at: www.cata.ca/files/CAIP/R_V_on_Throttling_%2820May09FINAL%29-1.pdf

Canadian Food Inspection Agency conflicted: Option Consommateurs

(PIAC 17/06/09) CFIA must focus its activities on the protection of Canadians, Option Consommateurs told the House of Commons Sub-Committee on Food Safety on June 10. Consumer protection is not an explicit element of the mandate or the mission of the Agency. Officially, its task is to manage food safety and to promote the industry. Anu Bose, Head of the Ottawa office of Option Consommateurs testified: “We believe that these objectives are contradictory and that they place the Agency in a potential conflict of interest. The protection of Canadians must be the priority.”

Option Consommateurs is therefore calling for greater transparency in the operation of the CFIA. Bose said: “If the Agency really wishes to rebuild its credibility with consumers, it must re-examine its structure with a view to openness and transparency. It should draw inspiration from international best practices. In the UK, the regulatory body’s motto is ‘Putting the consumer first.’ In Canada, the priority is unclear.”

Banks break promise on clear language in mortgages: Option Consommateurs

(PIAC 17/06/09) “Dominique Gervais, a lawyer with the budget counselling division of Option Consommateurs, a non-profit consumer rights group in Quebec, said ever since interest rates began to fall in January, the organization has received dozens of calls from confused bank customers unsure about how the financial institutions make their penalty calculations for the breaking of a mortgage agreement,” the Montreal Gazette reported on June 5.

“People are calling us because they find the penalties are too high,” Gervais said. “They think it is three months and then the bank arrives with its calculation of, say, $10,000. The person shops around and then when they decide they want to break their agreement and contact their bank, they find that the penalty has gone up to $15,000 and they don’t understand why.”

The Gazette’s Kathryn Leger reported: “These clauses are legal,” Gervais said. “But we think that in many cases, the banks are going too far because they are making their calculation on the basis of what the posted rate was at the time of the loan and not on any discounted rate that was agreed upon with the customer.”

“They are incomprehensible and, at times, it has taken six lawyers working here looking at a mortgage contract to be able to clearly understand a penalty clause,” the lawyer said. Gervais recalled that the banking industry has not made good on a pledge the Canadian Bankers Association made in 2000 to make clauses in mortgage contracts easier to understand by 2005,” the Gazette reported.

2. Banks must obey provincial consumer protection laws: Option Consommateurs

(PIAC 17/06/09) “Several financial institutions were ordered [on June 11] to pay more than $200 million to Quebec credit-card holders when a court ruled the institutions broke consumer-protection laws. … Michel Arnold of Option Consommateurs, a consumer-protection group, called the judgment a huge victory for consumers,” the Canadian Press reported on June 12.

CJAD reported: “The Quebec Superior court ruling in favour of consumers who say they were illegally charged for fees on their credit cards could have implications beyond Quebec, and beyond the banking and credit card industry. Option Consommateurs lawyer Stephanie Poulin says that while the class action suit involves only Quebec consumers of certain credit card services, the ruling could impact heavily in other provinces and on other industries.

“Poulin sees in the ruling a judicial confirmation that federally-regulated industries…like banks and credit card companies are not above provincial laws, such as Quebec’s consumer protection rules,” CJAD’s Claude Beaulieu reported on June 12.

PIAC wants cellphone competitor startup now

(PIAC 17/06/09) In submissions filed with the CRTC earlier this month, PIAC took a dim view of efforts by TELUS and Shaw to have the CRTC conduct a proceeding on whether new cellphone licencee Globalive Communications Corp. meets Canadian ownership requirements for carriers. PIAC noted an ownership review had already taken place under the aegis of Industry Canada prior to the issuance of Globalive licence in March and urged no further delay to the start-up of the new wireless carrier.

Quebec cracking down on cell carriers: Option Consommateur’s applauds Bill 60

(PIAC 17/06/09) “The Quebec government is cracking down on cellphone companies as part of a precedent-setting consumer protection bill that restricts the automatic renewal of contracts and limits penalties against consumers for rescinding an agreement,” the Globe and Mail reported on June 17. “Finally we have it. It’s been a long process but we finally got it done,” said Michel Arnold, president of Option consommateurs. “We will support this bill whole-heartedly but we expect a major battle from cellphone companies. It’s not over yet.

“The consumer protection group also applauded provisions in the bill that will require companies to include all costs in the price advertised for their product. Car companies will be required to include accessory costs such as transportation fees in the price being advertised. Cellphone companies will need to include the cost of all services in the final price,” the Globe’s Rhéal Séguin reported.

Cellphone companies lobby for a fee holiday: What about consumers?

(PIAC 17/06/09) “Canada’s biggest wireless companies are calling on Ottawa to slash the licensing fees they pay to access public airwaves, but there’s little indication that any savings will be passed along to subscribers – particularly when it comes to the controversial “system access” fees that show up on wireless customers’ monthly bills,” the Toronto Star reported on June 12.

The Canadian Wireless Telecommunications Association says the $130 million in spectrum licensing fees exceeds the costs of managing the public resource. Bell Canada wants a fee holiday. But there was no word the carriers would cut the $6.95 to $8.95 per month system access fees they charge to subscribers the Star reported.

”[The system access fee is] a misleading charge,” said John Lawford, a lawyer with the Public Interest Advocacy Centre, noting that such add-on fees allow cellphone companies to advertise lower prices,” the Star’s Chris Sorenson reported.

Banks must obey provincial consumer protection laws: Option Consommateurs

(PIAC 17/06/09) “Several financial institutions were ordered [on June 11] to pay more than $200 million to Quebec credit-card holders when a court ruled the institutions broke consumer-protection laws. … Michel Arnold of Option Consommateurs, a consumer-protection group, called the judgment a huge victory for consumers,” the Canadian Press reported on June 12.

CJAD reported: “The Quebec Superior court ruling in favour of consumers who say they were illegally charged for fees on their credit cards could have implications beyond Quebec, and beyond the banking and credit card industry. Option Consommateurs lawyer Stephanie Poulin says that while the class action suit involves only Quebec consumers of certain credit card services, the ruling could impact heavily in other provinces and on other industries.

“Poulin sees in the ruling a judicial confirmation that federally-regulated industries…like banks and credit card companies are not above provincial laws, such as Quebec’s consumer protection rules,” CJAD’s Claude Beaulieu reported on June 12.

Des pseudo-soldes chez Canadian Tire

(PIAC 17/06/09) « Dans le commerce de détail, les pseudo-soldes sont si fréquents, et parfois si mal déguisés, que les consommateurs ne s’en formalisent plus. Pourtant, la pratique est illégale. Les consommateurs devraient porter plainte auprès de l’Office de la protection du consommateur ou du Bureau de la concurrence » La Presse Affaires a rapporté le 1 juin.

« La semaine dernière, elle était à la recherche d’un vélo pour une adolescente. Dans les allées de la succursale Angrignon de Canadian Tire, elle a vu le Matterhorn Raleigh. Ça tombait bien, le vélo était en solde à 219,99$ jusqu’au 28 mai. Bien en évidence sur l’étiquette jaune fluo figurait le mot “rabais” en rouge. Un rabais de combien? Mystère. Mais en soulevant l’étiquette, la cliente a découvert que le vélo se détaillait au prix courant de 219,99$. Bref, il n’y avait pas d’aubaine. »

« Il n’est pas rare que les commerces attirent la clientèle avec de faux rabais.Par exemple, Jean-François Vinet, d’Option consommateurs, a suivi, l’an dernier, l’évolution des prix d’un ordinateur sur le site web d’un grand détaillant de produits électroniques. Il a découvert que le prix courant fluctuait d’une semaine à l’autre. Le détaillant le gonflait lorsqu’il offrait des rabais, de telle sorte que le prix de vente réel demeurait toujours le même. Les soldes n’étaient qu’un subterfuge » Sébastien Grammond a rapporté.

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