Consumer Protection Laws Changing for the Better

On July 30, 2005, the new Consumer Protection Act came into force.  There are new protections for consumers in situations that have become problematic.

The “negative option” is finally illegal.  The “negative option” is used to describe situations where someone sends you unsolicited goods or provides unsolicited services and then tries to make you pay for them. 

It used to be common for service providers to change the terms of service by sending you a notice which required you to respond to decline the new service and charges.  Then, for some reason, when Rogers Cable attempted the negative option some years ago, it hit the fan and there was widespread consumer revolt.  Consumers generally regard this as an offensive practice.  I don’t think anyone has had the nerve to try it since, so making it illegal was a natural step.

There is now a 10 day “cooling-off” period for purchasers of timeshares, fitness and vacation clubs.  I have had so many calls from people that attended some slick presentation by a timeshare seller, signed the agreement and woke up the next morning in a panic.  They are desperate to find a way out of the deal.  Finally, there will be a way out.

I can’t see any business that cares about customer satisfaction being annoyed about these provisions.  If you can’t sell your goods or services without using the negative option, maybe, just maybe, you ought to consider revisiting your business plan to find some other product or service that is easier to sell.

If the only way to sell timeshares is to put on slick presentations and convince people to sign deals on the spot and then force them to stay in the deal, maybe, just maybe, you shouldn’t be in the business.  If the timeshare is such a great deal and such a desirable purchase, why do they have to try so hard to sell them?  You’d think there would be a waiting list!

There is also a requirement that the final costs of home renovations or moving services cannot exceed the estimate by more than10%.  People are exceptionally vulnerable when their kitchen is torn apart and the renovator then demands more money to finish the job. 

This is good news for consumers.  The people that have lost the most from rogue businesses are the elderly, the uneducated and naïve consumers. 

Good businesses will welcome the changes, in my opinion.  Rogue renovators give the whole industry a bad name.  Anything that helps weed out the bad ones will give the industry a better image. 

Another piece of good news for consumers:  The feds have started the process to lower the criminal rate of interest from 60% to a variable rate that is 35% more than the interbank rate (currently 2.5%).  This will, hopefully, reduce the amount of payday loan businesses.  Hopefully, along with that, they will become more aggressive in pursuing the loan companies that currently operate and charge rates of over 600%.