The offer of rewards points (either through credit card spending or other loyalty programs) has become so ubiquitous in consumer businesses that there are hardly any companies of any significant size that do not offer some form of rewards points. As described below, certain proposed amendments to the Ontario Consumer Protection Act (the Consumer Protection Act) could affect the rewards program offered to Ontario consumers.
A private members’ bill (Bill 47, Protecting Rewards Points Act (Consumer Protection Amendment), 2016) (the Bill) received its first reading in October 2016 and has now been referred to the Standing Committee on Regulations and Private bills (the Committee). The Committee will be holding public hearings on Tuesday, November 29 from 4-5 p.m.
The Bill proposes to amend the Consumer Protection Act with respect to rewards points. Firstly, the definition of a “consumer agreement” is amended to include agreements under which rewards points are provided. Secondly, a new section is added that prohibits consumer agreements from allowing the expiry of rewards points. Rewards points are allowed to expire when the consumer agreement is terminated, unless it provides otherwise.
It is not clear whether the provider of rewards points could terminate the consumer agreements. Presumably, a unilateral termination right in favour of the provider would defeat the consumer protection purpose behind the proposed amendments (except in case of credit card agreements where the consumer agreements may be terminated for non-payment of credit card balance).
If this Bill is enacted into law, it is possible that other Canadian provinces may follow suit. Given the far-reaching impact of the Bill, in-house counsel and rewards points providers are advised to monitor the progress of this Bill through the legislative process.