“Thou shall not commit an unfair business practice”

The Consumer Protection Act (CPA) applies to most Ontario businesses including car dealerships. Under the CPA there are two types of unfair business practices: false, misleading or deceptive representations; and unconscionable representations. Consumers who face an unfair business practice may be entitled to cancellation of their contract for up to one year from the date of contract signing.

 

Two Types of Unfair Business Practices:

False, Misleading or Deceptive Practices:

• Failing to disclose a “material fact” (for example, not informing a consumer of structural damage to the vehicle).
• Deceiving a consumer by distorting a “material fact” (using exaggeration, hints or double meanings).
• Telling the consumer that the car can perform in a way that it cannot or is still under the manufacturer’s warranty if it is not.
• Saying the car is of a particular model, style, quality or grade if it is not.
• Telling the consumer that the vehicle or part of the vehicle is new (or unused) if it is not.
• Seriously understating the distance the vehicle has been driven or the amount of use it has had.
• Selling a repair, replacement, service or part which is not needed.
• Saying there is a specific price advantage if this is not true (for example, “the price will go up on Monday morning”).
• The dealer or salesperson misrepresents the authority of some employee to negotiate the terms of the agreement.
• The dealer or salesperson misrepresents the purpose of an additional charge.

Any consumer can fall victim to an unfair business practice. However there are those who are more vulnerable, and can fall victim to an unconscionable deal.

Unconscionable Representations:

• The consumer cannot protect his or her own interests (perhaps because of a disability, illiteracy, impairment, etc.). For example, if the consumer was drunk or under heavy medication at the time of signing a contract, that contract may be cancelled.
• The price grossly exceeds the price that should be charged.
• The dealer or salesperson put too much pressure on the consumer.
• The consumer has no possibility of meeting the payments.
• The deal is not in favour of the consumer, but is a great deal for the dealer.
• The dealer or salesperson gave a misleading opinion and the consumer relied on that opinion to his or her detriment.

The Consumer Protection Act is very clear – unfair business practices are not allowed. It sets serious penalties for breaches and gives consumers recourse if they have been misled. To learn more, click here