On September 12, 2024, the Government of Québec introduced Bill 72, entitled An Act to protect consumers against abusive commercial practices and to offer better transparency with respect to prices and credit (“Bill 72”).[1] The purpose of this bill is to make several important amendments to the Consumer Protection Act (the “CPA”) and other related regulations, mainly with respect to regulating practices related to tips, food pricing displays, long-term contracts of lease, credit contracts and itinerant merchants.
Businesses dealing with consumers in Québec should be aware of the new rules in this bill targeting various industries, given the recent strengthening of the provisions allowing for the imposition of penal fines or administrative monetary penalties for failing to comply with the requirements of the CPA and its regulations.[2]
Food Pricing Displays
First, Bill 72 introduces requirements for the sale price of food products intended for human consumption. In particular, these requirements include indicating the taxes applicable at the time of payment, displaying the price per unit of measurement, the price proposed to consumers who are not members of a loyalty program and the price applicable to the purchase of a set of food products.
Framework for Practices Related to Tips
Bill 72 also sets out certain practices related to tips by prohibiting merchants from offering predetermined tip amounts unless certain conditions are met.
Suggested tips will now have to:
- be calculated on the pre-tax price;
- allow consumers to determine the amount of the tip they wish to give;
- be presented in a neutral manner, all equally visible on the terminal.
Price Accuracy Policy: Discount Price Increased to $15
Bill 72 provides for an increase of the indemnity offered to consumers when the price of a good scanned at the checkout is higher than the price advertised where merchants use optical scanner technology.
This amount, originally set at $10 under the Order in Council respecting the Policy on accurate pricing, had not been reviewed in nearly 25 years and will now be $15. Accordingly, in the event of a price error, an item costing $15 or less will be free and, for an item over $15, a $15 discount will be applied.
Credit Cards, Lines of Credit and Other Forms of Open Credit
Regarding credit contracts, Bill 72 requires merchants entering into open credit contracts to hold a permit.
The bill also provides that membership or renewal fees payable under a credit card contract may be payable only once a year and must be included in the proposed credit rate (except in the case of a credit card and subject to certain conditions).
In addition, it prohibits all sureties from charging or collecting a payment from a consumer to enable the entering into a credit contract.
Bill 72 requires that all applications for open credit indicate the credit limit desired by the consumer and prohibits the merchant from granting the consumer a credit limit higher than that desired.
Lastly, it prescribes the order in which the consumer’s payments must be allocated. The merchant must first apply any payment to the debt with the highest credit rate, then to other debts in decreasing order of credit rate, unless one of the debts must be paid in instalments determined according to specific terms and conditions.
Itinerant Merchants Prohibited From Selling Certain Products
With regard to itinerant merchants, Bill 72 prohibits such merchants from entering into certain contracts with a consumer, including credit contracts, namely those concerning, even on an incidental basis, heating or air conditioning appliances, or decontamination or insulation services.
It also prohibits an itinerant merchant from supplying a service before the expiry of the 10-day cancellation period provided by law.
Moreover, it provides that a contract entered into by the consumer under or in relation to a contract made with an itinerant merchant forms part of the whole contract and is cancelled of right if the contract made with the itinerant merchant is cancelled.
Limited Consumer Liability of $50 for Debit Card Fraud
Bill 72 also provides for the establishment of a system to limit a consumer’s liability in certain circumstances, such as the unauthorized use of the consumer’s deposit account or fraud. Accordingly, the liability of any citizen who is a victim of bank account or debit card fraud will be limited to a maximum of $50. However, the consumer will be held liable for any losses incurred by the merchant if the latter establishes that the consumer committed a gross fault in protecting their personal identification number.
Other New Rules
Bill 72 sets out the conditions under which a merchant can include in an instalment sale contract or a long-term contract of lease the balance of a previous debt resulting from a contract relating to goods given in exchange. It also introduces several measures to give a consumer who enters into a long-term contract of lease protections similar to those under credit agreements. Moreover, under the bill, merchants are prohibited from making the entering of a contract for a consumer to acquire a road vehicle contingent on a credit contract or a long-term contract of lease.
It should be noted that Bill 72 could also allow merchants who have entered into a credit contract or a long-term contract of lease with a consumer to claim charges paid to a financial institution because of, for example, a returned cheque or a transfer of funds that could not be completed.
We will be following the parliamentary proceedings regarding this new bill with great interest, in particular to see whether any amendments will be adopted after special consultations and following the committee stage.
[1] The authors wish to thank Nikie Boillat-Proulx for her help with this bulletin.
[2] We invite you to read our recent bulletin on this subject.
