Protecting consumer rights and safety
Learn about the legislation that protects consumers and how it can affect your business.
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The Consumer Protection Act
How and where you do business affects consumers’ rights
The products or services you sell, and how and where you do business, will determine what information you must provide to consumers and the rights they have.
Charge no more than 10 per cent over an estimate
If your customer contracts include an estimate for the cost of the work to be done, the law says you can’t charge more than 10 per cent above that estimate, unless the customer agrees to the additional charges. You should ensure your estimate is as accurate as possible and, if the project changes in a major way, you should provide your customer with a revised written estimate that you both sign.
Refunds and exchanges
If you offer refunds and/or exchanges for your products or services, set out these policies in writing (on your receipts or agreements, for example) and mention them to your customer at the time of sale to avoid misunderstandings and disappointment.
Important! There are very specific circumstances when refunds are required under the Consumer Protection Act, 2002, such as a customer not receiving their goods or services on time or getting the wrong product.
The following practices are not allowed under the Consumer Protection Act, 2002.
False, misleading or deceptive representation
To help you understand what might be a false or deceptive representation, consider the following examples:
- an appliance store salesperson tells a consumer the model and style of a refrigerator currently on sale is the most eco-friendly, top consumer-rated, newest model the manufacturer makes – but the salesperson knows that information is out-dated and no longer true
- an owner of a spa providing massage services tells clients that all of its staff are registered massage therapists, when they do not actually have the designation
- a store sells electronics advertised as new when they have actually been refurbished
- a salesperson at a repair shop for sewing machines tells a customer they need to replace a part, when that part does not need to be replaced
There is a secondary category of unfair practices, known as unconscionable (meaning inherently unfair or abusive to the consumer) representations. Examples of these include:
- asking a consumer who is vulnerable, because of age or language barriers, to sign a contract for goods or services, when the consumer is not in a position to protect their own interests
- selling a home water purification system for thousands of dollars, when a consumer could purchase the same system for hundreds of dollars
- pressuring a consumer to enter into an agreement
It is also against the law to hold a customer’s items in order to pressure the customer to renegotiate terms of the contract, such as demanding extra payment. For example, if a moving company is transporting a customer’s goods, it is illegal for movers to refuse to deliver the goods until the customer pays additional money to the agreed-upon price.
Consumer rights and business impacts
If an agreement resulted from an unfair business practice by a supplier, the consumer has one year after entering the agreement to withdraw from it and demand a refund. As a business, you have 30 calendar days from the time a consumer provides notice of withdrawal to refund their money. If a return and refund is not possible, a consumer may be entitled to other compensation through court action.
Because committing an unfair business practice is a violation of the Consumer Protection Act, 2002, the consumer could take you to court and, if successful, the court may award damages, including punitive damages.
Gift cards, gift certificates and vouchers
With limited exceptions, gift cards, gift certificates and vouchers:
- cannot have an expiry date
- are not subject to tax when sold
- cannot have special conditions or terms limiting their use
When the act may not apply
The Consumer Protection Act, 2002 provides broad protections that apply to many transactions. Some transactions, by their very nature, or if conducted by various occupations, are exempt from the act as a whole or from parts of it. Some of the more frequent of these exemptions include:
- if you are part of a recognized professional group that regulates your services (such as doctors, veterinarians, architects, accountants or pharmacists)
- accommodations, such as a hotel, are exempt from some parts of the act
- if you are selling your goods/services through an auction, you are exempt from some parts of the act
- if the goods you are selling are perishable and delivered to the consumer within 24 hours of being ordered (e.g., pizza delivery or restaurant takeout), you are exempt from some parts of the act
- if you are selling lottery tickets or similar products and are a charitable or religious organization, you are exempt from some parts of the act
- Note: For some of these special cases – such as accommodation and lotteries – businesses may need a specific licence to do business.
The Technical Standards and Safety Act
The Technical Standards and Safety Act, 2000, contains regulations designed to protect Ontarians in four key sectors:
- elevating and amusement devices (e.g., elevators, escalators, ski lifts, and roller coasters)
- boilers and pressure vessels, and their associated operating engineers
- upholstered and stuffed articles
The Technical Standards and Safety Authority is responsible for administering the act and associated regulations in Ontario.
The Horse Riding Safety Act
The Horse Riding Safety Act, 2001 sets and enforces safety standards in commercial recreational horse riding establishments.
Under the act, if riders are 18 years old or younger and ride horses more than 14.2 hands (147.32 cm) high, the horse-riding establishment’s owner must ensure the rider is protected by certain safety equipment:
- a helmet that meets safety standards for equipment established by the American Society of Testing and Materials (ASTM), the British Standards Institute (BSI) or the European Safety Standards
- hard-soled footwear with a heel no less than 1.5 cm thick
- tack (saddles, stirrups, reins, etc.) properly fitted on the horse
Owners must make the required equipment available at a reasonable cost to customers.
Breaking these rules could result in a fine of up to $5,000.
The Horse Riding Safety Act does not apply to:
- renting ponies (horses less than 14.2 hands [147.32 cm] high)
- riders participating in horse shows or competitions
- non-commercial settings, such as private ranches or farms
Under the Highway Traffic Act, riders under the age of 18 are also not allowed to ride on a highway unless they are wearing the required safety equipment.