The Consumer Protection Act defines unfair practices, makes it very clear “misrepresentation” is not allowed, sets serious penalties for breaches and gives consumers real recourse if they have been misled.

There are two types of unfair practices:

1. False, misleading or deceptive representations.
2. Unconscionable representations.

“False, misleading or deceptive practices” include:

1. Failing to disclose a “material fact” (e.g., not informing a customer of structural damage to the vehicle).
2. Deceiving a customer by distorting a “material fact” (using exaggeration, hints or double meanings).
3. Telling the customer the car can perform in a way that it cannot or is still under manufacturer’s warranty if it is not.
4. Saying the car is of a particular model, style, quality or grade if it is not.
5. Telling the customer that the vehicle or a part is new (or unused) if it’s not.
6. Seriously understating the distance the vehicle has been driven or the amount of use it has had.
7. Selling a repair, replacement, service or part that is not needed.
8. Saying there is a specific price advantage if this is not true (e.g., “The price will go up on Monday morning!”).
9. The dealer or salesperson misrepresents the authority of some employee to negotiate the final terms of the agreement.
10. The dealer or salesperson misrepresents the purpose of an additional charge (e.g., freight and registration fee).

“Unconscionable representations” occur if:

1. The consumer cannot protect his or her own interests (perhaps because of a disability, illiteracy, impairment, etc.). For example, if the customer was drunk or under heavy medication when he signed the contract, he can have the deal cancelled.
2. The price grossly exceeds the price that should be charged.
3. The dealer or salesperson put too much pressure on the customer.
4. The consumer has no possibility of meeting the payments.
5. This is an absolutely poor deal for the consumer (and is a one-sided, excellent deal for the dealer).
6. The dealer or salesperson gave a misleading opinion and the consumer relied on that opinion to his or her detriment.

Note: Under Section 18 of the CPA, a court might award punitive or exemplary damages in cases of unfair practices. The consumer who takes the dealer to court might be awarded a sum much higher than the amount of the actual damage if the judge decides to punish or make an example of that dealer.

Penalties for Breaching the Consumer Protection Act

Penalties for breaching the CPA can be severe. Individuals convicted of an offence under the Act can receive a maximum of two years less a day in jail and/or a fine of up to $50,000. A corporation convicted of an offence can be fined up to a maximum of $250,000.

Remedy Available to the Consumer

Under Section 18 of the CPA, if consumers believe they have been subjected to an unfair practice (a false, misleading, deceptive or unconscionable representation) they have the right to request cancellation of the contract within one year of signing the contract. After one year, consumers cannot cancel the contract, but can still sue for damages.