New amendments to the Consumer Protection Act (Ontario) (the “Act”) made in December 2014 in respect of water heater agreements will come into force on April 1, 2015. We previously reported proposed amendments to the Act (that will also come into force on April 1) in our e-Lert of December 19, 2013: “Recent Consumer Protection Developments.” Those amendments introduced a 20 day cooling-off period for water heater consumers and a prohibition on delivery and installation of water heaters to consumers within such 20 day cooling-off period. The December 2014 amendments to the Act contain new special rules for water heater agreements.
Changes to Disclosure Statement
The required disclosure statement to be provided to a consumer entering into a water heater agreement has been expanded to include, amongst other requirements:
- a statement whether the water heater is used or reconditioned
- detailed information respecting amounts payable by the consumer or charged to the consumer under the agreement
- a statement that the supplier warrants the water heater will work and provide hot water and will not leak or rupture during the term of the agreement
- cover pages and additional mandatory statements
Verification Call Now Required
In addition to the statutorily mandated changes to the underlying disclosure statements, water heater suppliers must now make a verification call to all consumers who enter into a water heater agreement as a pre-condition to the agreement becoming effective. The call cannot be made on the same day the agreement is entered into and must be made no later than the 15th day after the agreement sign-up date. The person verifying the agreement for the supplier must follow the script available on the Ministry of Government and Consumer Services (the “Ministry”) website and must comply with the guidelines relating to the use of the script. When the call is made to the consumer, the supplier cannot be present at the consumer’s residence. Additionally, the call must be recorded and the consumer must be made aware of the recordation.
Verification calls are not required in instances where the consumer initiates contact with the supplier, where a person authorized by law prohibits or restricts the use of the water heater or if there are safety concerns regarding the consumer’s existing water heater.
When the Cooling-off Period Does Not Apply
In addition to the verification call exception noted above, the 20 day cooling-off period will not apply in the following circumstances:
- when the consumer initiates contact with the supplier
- if a person mandated by statute prohibits or restricts use of the water heater
- if there are safety concerns in respect of the consumer’s existing water heater
Where there is a prohibition or restriction on the water heater or there are safety concerns, the cooling-off period does not apply only in respect of the supplier who supplied the consumer with his or her existing water heater. The amendments are silent as to whether the cooling-off period applies if the original agreement in respect to an existing water heater remains in place and there are repairs or replacements to the existing water heater.
No Installation of Water Heater During Cooling-off Period
As of April 1, 2015, during the cooling-off period, the installation of a water heater and the removal of a water heater from a consumer’s residence is strictly prohibited.
New Cover Pages
All water heater agreements entered into on or after April 1, 2015, must have a specific cover page - literally the very first page of the agreement - providing consumers with information about their rights. The cover pages are available on the Ministry’s website. Suppliers have to ensure the cover page is attached to the agreement before meeting the consumer and obtain the consumer’s signature for both the cover page and the agreement itself. Modifications to the cover page, including page size, are not permitted.
If the 20 day cooling off-period applies, the cover page “Water Heater Contracts – What You Need to Know” is required.
If the 20 day cooling-off period does not apply because the consumer initiated contact, the cover page “Consumer-Initiated Calls Water Heater Contracts – What You Need to Know” is required.
If the 20 day cooling-off period does not apply because (i) a person mandated by statute has prohibited or restricted the water heater or (ii) if there are safety concerns in respect of the consumer’s existing water heater, the cover page “Unsafe or Recalled Water Heaters – What You Need to Know” is required.
New Mandatory Statements
All water heater agreements must include new mandatory statements, also available on the Ministry’s website. The statements must be completed as instructed in the guidelines included with them. Each statement must be signed if it is not located on the same page where the consumer signs the agreement. Similar to the cover pages, modifications to the statements are not permitted.
If the 20 day cooling-off period applies, the statement “Mandatory Statement – if the restriction on time for performance applies” is required.
If the 20 day cooling-off period does not apply because (i) the consumer initiated contact, (ii) a person mandated by statute has prohibited or restricted the water heater or (iii) there are safety concerns in respect of the consumer’s existing water heater, the statement “Mandatory Statement – if the restriction on time performance does not apply” is required.
Additional Disclosure Requirements
Prior to the new amendments, exemptions to disclosure under Part IV (Rights and Obligations of Specific Consumer Agreements) of the Act could be relied upon. Water heater agreements must now provide the disclosure required under both Part IV of the Act, in respect of direct agreements for water heaters, and Part VIII of the Act, which deals with lease agreements.
This e-Lert provides an overview of the amendments coming into force April 1, 2015. Suppliers of water heaters should familiarize themselves with the new disclosure requirements. The cover pages, mandatory statements, verification guidelines and script can be obtained from the Ministry of Government and Consumer Services.