On November 8, 2013, the Office de la protection du consommateur (OPC) released its first consultation document concerning phase four of its review of the legislation it administers. This fourth phase is much broader in scope than the third phase, which was specifically concerned with credit activities, and encompasses travel agents, collection practices and funeral services, as well as various amendments to the Consumer Protection Act (CPA).

In the section of the consultation document that discusses the proposed amendments to the scope of the CPA, the OPC notes that many consumers join reward programs, not all of which are free of charge, that entitle them to obtain certain goods and services. The contracts for such cards generally stipulate that the more consumers use them or purchase products at certain specified locations, the more points or other benefits they earn, which they can then exchange for goods and services. The OPC remarks that certain reward card issuers have unilaterally changed the value of the points earned during the term of the contract and that the rewards of which consumers were thus deprived were of considerable value. The OPC concludes by mentioning that a class action has been instituted against a drugstore on this issue.

The OPC would like reward cards to be included in the definition of “prepaid cards”. This would be a major change, as it would make reward cards subject to rules set out in the CPA and the Regulation respecting the application of the Consumer Protection Act. These rules provide that merchants must inform consumers of the terms of use of the card; that any stipulation of an expiry date is prohibited unless the contract provides for unlimited use of a service; that consumers cannot be charged for the issue or use of the cards except as provided by regulation; and that merchants who are party to a contract for the sale of such a card must refund the card balance on the consumer’s request if it is less than $5.

In light of the OPC’s proposal, we believe that businesses offering loyalty programs should take part in the OPC’s consultation process in order to express their concerns about this proposed legislative amendment.