1998 TASSE REPORT ON CONSUMER PROTECTION AND THE ONLINE ENVIRONMENT
I. EXISTING LEGAL "FRAMEWORK"
1.Legislation of Broader Application
Online purchasing is in its essence like any other purchase of goods/services. Only the means of conducting the transaction differs. Consumers transacting online should still be and are still entitled to the same protection as provided by the laws, regulations and practices that apply to existing forms of commerce, especially those laws of general application. However, in the online world, traditional mechanisms to address imbalances in the marketplace fail to provide sufficient protection to consumers. Shortcomings of the SGA [Sale of Goods Act] and UBPA [Unauthorized Business Practices Act] legislative schemes, for example, include 1) the fact that the SGAs apply only to goods; 2) the provision in most SGAs that rights, liabilities and warranties under the SGA can be waived by agreement between the parties; 3) the possibility that other unfair practices which are directly relevant to transactions formed on the Internet are not specifically mentioned in the UBPAs.
Most provinces and the two territories have enacted consumer protection legislation to address the lacunae of this broader legislation with a view to dealing with the particularities of consumer transactions. However, due to the novelty of electronic commerce, many consumers are facing problems which were not anticipated at the time current legislation was enacted. Maintaining the existing focus on court redress mechanisms and merely modifying legislation to include electronic commerce transactions within its ambit of protection, however, may not offer the best or most practical solution.
In the case of DSA [Direct Sales Act], disparity in the protection provided under the provisions of this Act by the different provinces/territories has already been noted. Two provinces and the Yukon require face-to-face encounters between the seller and the buyer in order for the provisions to apply. Further, as mentioned before, the licensing requirements imposed on direct sellers by provincial and territorial legislation would render the application of these provisions to Internet vendors very impractical.
One significant benefit provided to buyers under the DSAs, is the "cooling off" period - the period during which a contract may be cancelled by the buyer, without cause. Under the terms of the 1994 Agreement on Internal Trade, the Provinces agreed to work toward harmonizing their direct sales legislation with respect to rescission rights. In 1996, the provinces agreed to a uniform 10-day "cooling-off" period. 26 Some provinces/territories also provide extended "cancellation" periods in the situation where goods and services have not been supplied or delivered. A legislative update of consumer protection law might include the incorporation of similar provisions applying to online consumer transactions.
2.Consumer Protection Legislation
An overview of Canadian consumer protection legislation revealed inconsistent and unequal levels of consumer protection among the different jurisdictions.
The disparities between the jurisdictions are significant and consumers will be protected in
Varying degrees depending on the law governing a particular transaction. The discrepancy may be further exacerbated by the fact that courts are not required to enforce the judgments of courts in other provinces/territories.
In some cases, the title of the Act ("CPA") does not appear to adequately reflect its content. We have seen that in the case of Newfoundland and P.E.I., for example, the CPAs focus exclusively on credit transactions and do not apply to consumer transactions not involving credit. In many cases, consumers involved in non-credit or non-direct sale transactions may only effectively seek relief under the SGAs and the UBPAs. Similarly, B.C.'s CPA offers most of its protection to purchasers in the case of executory or direct sale contracts. Other consumers do not appear to have the same kind of protection and must resort to protection provided in other Acts.
On the other hand, six provinces and the two territories have included in their CPA specific provisions relating to conditions and warranties to be implied in every consumer sale transaction or to every sale of consumer products. In all cases the implied conditions specified in the CPA cannot be waived by the parties. The protection in three provinces, New Brunswick, Saskatchewan and Quebec, and of the two territories are even more extensive than that offered by the other three provinces, given their inclusion of additional implied conditions/warranties, (which also cannot be waived), and the provision of a redress mechanism within the CPA itself.
Online consumers will benefit from the current protection under the SGAs in all provinces/territories where the transaction is for a sale of goods. Online consumers can also benefit (in all provinces save New Brunswick, Nova Scotia and the territories) from UBPA-type legislation for relief against any vendor/seller for misrepresentations (of the type listed) made to the consumer; in most cases the consumer will be able to avail her/himself of redress mechanisms provided in the SGAs. In most jurisdictions online consumers will also be able to avail themselves of whatever protection is offered by the respective CPAs. Alberta has incorporated these provisions in its new Fair Trading Practices Act.
Since provincial/territorial laws only operate within the limits of the enacting jurisdiction (except where conflict of laws rules permit otherwise) the difficulty of enforcing applicable remedies may ultimately leave the consumer empty handed and dissatisfied.
Common Issues
Finally, while the common issues raised in Part III are of particular significance in the context of electronic commerce in general, these issues should perhaps, be addressed in a broader commercial context, accommodating both consumer-to-business transactions as well as business-to-business transactions. We refer in particular to issues relating to the definition of "writing", the desirability of defining "signature", general issues of contract formation (what constitutes an offer, when and where a contract is formed, the issue of acceptance, etc.)
Most of the common issues will need to be addressed in the broader context of online commercial transactions to account for business transactions as well as consumer transactions
II. IMPORTANT ISSUES IN ONLINE TRANSACTIONS
This part attempts to gather and redefine the questions raised in the second half of the previous part.
1.Contract Formation
2.Formal Requirements
3.Jurisdiction
4.Contents of the Contract
5.Misrepresentations
6.Conditions and warranties
7.Interpretation Rules
8."Cooling off" Period
9.Delivery
10.Redress Mechanisms
This part proposes to discuss each of these issues and their importance in online consumer transactions. We will also canvass various options that might be considered to ensure that consumers using the Internet to purchase goods and/or services are adequately protected. As will be seen from our analysis, there are issues which might best be addressed through effecting changes in the law, while others might preferably be left to the private sector to address, through, for example, the development of codes of conduct or "best online practices".
1.Contract Formation
Contract formation issues are likely to arise every time a consumer purchases goods/services online. Consumers may question whether a particular advertisement on a vendor's home page constitutes an offer or an invitation to treat; whether the consumer is the offeror or the offeree; when an offer is deemed to have been accepted; whether the acceptance of an offer will be confirmed or whether the transaction itself will be confirmed.
These questions are not specifically addressed in the legislation and courts are likely to rely on general common law and civil law principles to resolve them. Since an offer stems from a statement or conduct by a person indicating a willingness to enter into a contract on certain terms with another person, one could assume that the vendor is the offeror, offering goods and/or services for sale at a certain price. The consumer would thus be the offeree, accepting to purchase the goods/services under the terms dictated by the vendor. In the case of all online transactions, the contract will be executory in nature, in the sense that the terms of the contract are dictated by one party, the vendor, and the goods/services will be delivered once payment has been effected. Online contracts are also a form of distance selling. Some Canadian jurisdictions have recognized the potential for abuse of consumers where contracts are executory and formed at a distance.
There are also specific issues with respect to acceptance. A contract will be deemed to have been accepted when the offeree signifies that s/he wishes to form a contract on the terms stipulated in the offer. The statements or conduct constituting acceptance are not always obvious when transacting on the Internet. Should amendments be made to legislation to oblige online vendors to indicate within the contract what will constitute acceptance? This indication might then be recognisable by the consumer as an act of purchase.
Perhaps the best way to encourage vendors to resort to this kind of practice would be to develop a model acceptance or transaction confirmation scheme as part of an industry code of conduct, whereby adherents to the code would agree to use such a process.
Contract Formation
Contract formation issues should generally be left to the determination by the courts;
Consideration should be given to the enactment of legislative provisions requiring vendors to specifically indicate what would constitute an acceptance on the part of a purchaser in online transactions;
A model acceptance scheme and/or a model transaction confirmation scheme should be developed as a complement to the legislative provisions referred to above, to guide the private sector;
2.Formal Requirements
While a written contract is not required in the case of all "consumer transactions", executory contracts, direct sales contracts and credit contracts are generally required by law to be in writing and signed by the consumer and/or the vendor. Since most online transactions are credit transactions and are executory in nature, many of these contracts may be in violation of the formal requirements of current legislation. Does such a contract when formed online, constitute a contract "in writing" and under what conditions will it be deemed to have been effectively "signed" by the consumer? Will a computer printout serve as a legally acceptable duplicate original copy of the contract? Current definitions of "writing" in the Interpretation Act of each province and territory might be broad enough to include online contracts. If they are not, are online contracts invalid?
The purpose of requiring that a contract be in writing and that the consumer be provided with a copy of the contract is to ensure that the consumer has a discernable record of the transaction. It is arguable that "fully integrating data into a broad database loses that capacity". Quebec has already recognized this evidentiary question and has incorporated in its Civil Code provisions dealing with computerized records. Documents reproducing a juridical act which was entered on a computer system make proof of the content of the act if it is intelligible and if its reliability is sufficiently guaranteed.
These issues go beyond the narrower situation of the online consumer transaction. While provincial governments have already taken steps to address evidentiary issues with respect to electronic documents, laws will generally have to be updated to be consistent and conducive to the realities of electronic commerce.
Formal Requirements
Consideration should be given to enacting a legislative provision which would define the conditions under which an electronic contract constitutes a contract or document "in writing"; similarly, a definition of what constitutes a "signature" might also be considered;
3.Jurisdiction Issues
The Quebec Civil Code and its CPA addresses the "jurisdiction" issue by expressly adopting the "instantaneous communications" rule for all contracts, regardless of the method of communication used by the parties. According to this rule, all contracts are deemed to have been formed when and where acceptance was received by the offeror.
Assuming the vendor is the offeror, the contract is deemed to have been formed in the jurisdiction of the offeror at the time s/he receives the consumer's acceptance. In the case of contracts formed at a distance, however, the CPA modifies the general principles and the distance sales contract, which may include an online contract in certain circumstances (provided it is not solicited by a consumer), is deemed to be entered into at the address of the consumer.
As a result, under this rule, the contract will, in the context of a consumer transaction, be formed when the vendor receives the consumer's acceptance and the contract will be subject to the jurisdiction of the province/territory in which the consumer resides. The protection afforded by this provision may, in some cases, be illusive, as the consumer residing in Quebec may be transacting with a vendor in Europe or Asia. While the consumer may, in that case, bring an action against the foreign vendor in Quebec, the value of a judgment against the vendor is likely to be limited if the vendor does not have assets in Quebec.
Common law jurisdictions have not set out jurisdiction rules as clearly and there is some debate as to whether online transactions should fall under the "instantaneous communication" rule, and be deemed to be formed at the place and time where the acceptance is received, or under the "mail box" rule, according to which the contract is formed when the acceptance is expedited or mailed by the consumer.
Since online transactions are occurring at increasingly greater speeds, it is likely that the
"instantaneous communications" rule will apply and online contracts will be deemed to have been formed when and where the acceptance is received, namely, at the address of the vendor.
None of the common law jurisdictions, save for Saskatchewan and Alberta, in its newly enacted Fair Trading Practices Act, provide an exception in the case of consumer contracts.
Accordingly, consumers residing in the common law provinces and territories may often be subject to the laws of the jurisdiction of the vendor, unless the courts determine otherwise. Even if the consumer had a better chance of obtaining and enforcing a judgment against a vendor under the laws of the vendor's jurisdiction, commencing an action in the foreign vendor's jurisdiction may not appeal to the consumer who would have to incur travel expenses and the cost of "foreign" legal advice to defend his/her rights.
Jurisdiction issues in the context of online transactions present one of the greatest challenges to the current system's way of addressing disputes which involves two or more provinces, territories or countries. As mentioned in the Report on New Approaches to Consumer Law in Canada, "beyond the best intentions and good will, there is no formal way for a province whose citizens are allegedly victims of cross-border scams to receive assistance from a second province where alleged perpetrators are located and where the alleged fraudulent conduct is taking place".
Amendments or additions to legislative schemes already in place may be helpful to address these issues more effectively. It may be preferable to address these questions in a private sector code of conduct or best online practices pursuant to which consumers would refer to an appointed ombudsperson for the resolution of their complaints. Such a code or practices might also include an informal complaint mechanism which in turn, would address situations where vendors and consumers are in different jurisdictions.
Jurisdiction Issues
Consideration should be given to a legislative provision to the effect that online contracts
entered into by consumers are deemed to have been entered into at the address of the consumer;
The private sector should be encouraged to develop best practices in dealing with complaints by online consumers; specifically, guidelines might be established for the
informal review and efficient resolution of consumer complaints; vendors would be encouraged to provide information on complaint handling services prior to the formation
of the contract;
4.Contents of the Contract
Specific content and disclosure requirements are now mandatory in direct sales contracts and credit transactions in most jurisdictions. Required information includes the name and address of the seller and/or salesperson, description of the goods/services, price and terms of payment, etc. Most other transactions do not have similar requirements. Consumers are particularly vulnerable when transacting online since in many instances, the only information available to the consumer is the vendor's home page address (URL). The consumer may not know who s/he is dealing with or where the company is located.
Consumers should at the very least be able to clearly identify the vendor and the location of the business they are transacting with. Other relevant information includes a clear statement of the terms of the contract, details on the products/services provided and information on available methods of payment.
Consumers should be provided with all relevant information pertaining to the transaction. The vendor might, for example, be required to provide information on the following:
1.the vendor's identity and place of business (including full address and contact name);
2.the duration of the offer;
3.date and place the contract is concluded;
4.a complete description of the goods and services offered;
5.since the transaction consists of a sale by description, there should be an implied condition that the goods are of merchantable quality;
6.the total price of the goods including GST, PST, shipping and handling charges and terms of payment; if additional taxes or duties are to be levied, they should be brought to the consumer's attention;
7.a statement of warranties applying to the goods/services;
8.the currency and the exchange rate should also be clearly stated;
9.as many online transactions are paid for via credit cards, the disclosure requirements set out in current legislation should also appear in online contracts;
10.if a cooling-off period is legislated, information about an appropriate cancellation notice should be provided;
11.a date for the delivery of the goods or the performance of the services should be indicated;
12.information pertaining to the possibility of refunds or exchange and the procedure for doing so;
13.information pertaining to possible complaints and the name, telephone number and address of the person to be contacted;
14.information about any informal redress mechanisms adopted by the vendor in case of disputes.
It is for consideration whether a legislative provision should be adopted making some of this information legally mandatory with no possibility of waiver by either party. A contract formed in violation of these requirements would be deemed to be void or voidable.
There could also be a strengthening of the requirements pertaining to sales by description. Under the SGA, there is an implied condition that goods purchased through a sale by description are of merchantable quality. While this condition cannot be waived, the parties can agree that the sale is not a sale by description. In the case of online transactions, it would appear that all sales are sales by description since they are contracts formed at a distance.
A legislative amendment might include a provision whereby parties cannot provide that an online transaction is not a sale by description; there might also be a provision, as there is in many provinces/territories, that goods and services purchased online will correspond to the description made of them.
A non-legislative option may be to include, as part of a code of conduct or best practices,
guidelines on the information to be made available to consumers on the vendor's business, the terms of the contract and payment methods. Specific industry guidelines (sector by sector) would mandate the information to be provided on products and services offered for sale. Vendor Associations organized along industry lines might place a "stamp" or "seal of approval" on a member's Web page certifying that the vendor subscribes to the practices established by the association in question and has provided information on its business which is readily accessible by the consumer. The consumer could then access this information by clicking on the seal etc. The Association would reserve the right to remove the seal if the vendor did not comply with disclosure standards.
Contents of Contract
Consideration should be given to a legislative amendment setting out what minimal
information vendors should be required to provide consumers prior to the formation of the
online transaction;
The private sector should be encouraged to develop sector-by-sector guidelines on information to be provided to consumers on the vendor's business, the terms of the contract, the goods and services sold, payment methods and informal redress mechanisms;
5.Misrepresentations
All provinces except Nova Scotia, New Brunswick and the territories currently have legislation governing unfair business practices.
Online consumers can already avail themselves of the provisions set out in legislation governing unfair business practices. Examples of unfair practices which might arise in the context of electronic transactions and which are already part of current legislation include:
1.misrepresenting the price or charging a price that is grossly above that being offered for similar products;
2.entering into a transaction in which the consumer is not likely to either receive the goods/services or receive any substantial benefit from the subject matter of the transaction;
3.entering into a transaction which stipulates such harsh and adverse terms as to be inequitable to the consumer;
4.representations that the goods or services have special advantages that they do not have;
5.using misleading or deceptive advertisement;
6.holding out that goods have particular characteristics in appearance, quality or performance which they do not;
7.representing that goods are new or reconditioned when they are not.
Practices which are not currently covered by the UBPAs might include misrepresentations as to the identity or address of the vendor, misrepresentations as to the currency and exchange rates; misrepresentations as to refund policies, misrepresentations as to the time for delivery of goods, etc. In all provinces which have enacted UBPAs or similar provisions, the Lieutenant Governor in Council or the Minister has some authority to make regulations. In the case of Ontario, British Columbia, Alberta (in its new Fair Trading Practices Act) and P.E.I., the Minister or Lieutenant Governor in Council may prescribe or specify practices which are unfair or deceptive. In the case of Manitoba, Saskatchewan and Newfoundland, the Lieutenant Governor in Council may make regulations respecting other matters necessary for carrying out the purpose and intent of the Act or to give effect to the purpose of the Act. Given the fairly broad wording of the UBPAs, this power to make regulations may or may not include the specification of additional unfair practices to which the UBPA would apply. As consumer involvement in the electronic environment increases and more exchanges between consumers and vendors occur online, unfair practices which are particular to the online environment and to a specific industry are likely to become more apparent. Consideration should be given to updating or clarifying current UBPAs to ensure that new unfair practices are included.
Under current legislative schemes where a vendor is suspected of deceptive practices the Director of Trade Practices has powers of investigation and in some provinces has the power to order the cessation of an unfair practice without the requirement of court approval Saskatchewan is the only province which makes a mediation attempt mandatory. A similar provision might be considered in all jurisdictions.
Misrepresentation
The list of unfair practices covered in provincial legislation should be updated to address
new practices adopted by online vendors and to secure online consumer protection; as part of a code of conduct or best practices, private sector vendors should be encouraged to develop industry norms for appropriate behaviour in offering consumer transactions online;
It is for consideration whether mediation should be made mandatory in case of unfair practices;
6.Conditions and Warranties
SGAs provide for basic conditions or warranties to be implied in every contract for the sale of goods. These include 1) condition as to title; 2) warranty as to freedom from encumbrance; 3) warranty as to quiet possession. Some provincial and territorial CPAs have added further warranties in addition to the SGA conditions/warranties which are to be implied in every consumer transaction or to every consumer sale. They include, for example:
a.a warranty that goods purchased by description will correspond with the description;
b.a condition that the goods are of merchantable quality except for any described defects;
c.a condition that the goods are new and unused unless otherwise described;
d.a condition that the goods will be durable for a reasonable period of time;
e.a warranty that services will be performed in a skilful and workmanlike manner;
f.that the product is of such quality, state or condition as to be fit for the purpose for which products of that kind are normally used;
g.a warranty as to quality (i.e., latent defects).
Consideration should be given to streamlining the conditions or warranties to be implied in a consumer transaction occurring online. In some provinces/territories, the conditions and/or warranties are to be applied to consumer sales of goods36; in other provinces, the conditions and/or warranties are to be applied to sales of consumer products37 and/or services.
As a large number of electronic transactions involve the sale of services, it is for consideration whether current legislation should be amended to harmonize protection across Canada and create greater consistency in levels of protection by having the same conditions and warranties implied in contracts for the sale of both goods and services. It has been noted that some provinces do not have additional warranties/conditions within their CPA legislation (P.E.I., Alberta and B.C.). Ontario includes only minimal conditions/warranties (those applying to sales of goods under the SGA). Amendments might be considered to provide for similar conditions/warranties to be implied in every consumer transaction.
Warranties and Conditions
Conditions and warranties to be implied in online consumer transactions should be streamlined and should apply to both goods and services;
7.Interpretation of the Contract
Rules of interpretation in common law jurisdictions are fairly general and broad in scope. While few provinces/territories (Alberta is the only common law province to have recently done so in its Fair Trading Practices Act) have enacted specific rules for the interpretation of consumer contracts, the common law rule in cases where a contract is ambiguous and open to more than one meaning is that the meaning which is least favourable to the party that drafted the document governs. Quebec has specific legislative provisions which gives the consumer the benefit of the more advantageous interpretation in certain situations. The consumer is protected where there is doubt or where clauses in a consumer contract are external, ambiguous, illegible, incomprehensible or abusive. Consideration should be given to a legislative provision, perhaps similar to that recently enacted in Alberta, protecting the consumer against external, ambiguous, illegible, incomprehensible or
Abusive clauses.
Interpretation
A legislative provision should be considered to protect consumers against external,
ambiguous, illegible, incomprehensible or abusive clauses.
8."Cooling-Off" Period
Currently, only the legislative schemes pertaining to direct sales give the consumer/purchaser the option to cancel a direct sales contract for any reason within a period of time referred to as the "cooling-off" period. Pursuant to harmonization efforts by the provinces/territories, it is expected that a ten-day period will soon be uniformly implemented. Most provinces/territories also provide for cancellation if the goods/services are not supplied within a certain period of time and provided that the purchaser does not accept them when they are delivered. There is no similar provision for non-direct sales contracts.
As consumers purchasing online are expected to purchase immediately, they will not, in most cases, have an opportunity to carefully consider the offer before purchasing the good or service in question. Online consumers should be provided with a reasonable period of time to cancel the contract without cause. The European Commission's Directive on Distance Selling recommends a period of at least seven working days during which the consumer can withdraw from the contract without penalty and without giving any reason(s). The only charge to be born by the consumer would be the cost of returning the goods.
Also for consideration is the enactment in conjunction with a cooling off period, of a provision similar to s. 22 of Quebec's CPA which states that "no merchant may, when soliciting a consumer for the purpose of making a remote-parties contract or when making such a contract, demand total or partial payment by the consumer or propose to collect such payment before performing his principal obligation", namely the delivery of goods. Alternatively, jurisdictions may consider enacting provisions ensuring that if the price of the goods/services are fully or partly covered by credit, the credit agreement can be cancelled without penalty, if the consumer exercises his/her right to cancel
the contract.
Cooling-Off
Consideration should be given to the enactment of "cooling-off" periods for online consumer transactions;
Similarly, if within the "cooling-off" period, the consumer exercises his/her right to cancel
the contract, s/he may also cancel, without penalty, any accompanying credit arrangement;
9.Delivery of Goods/Services
Under SGAs, the payment of the price stipulated in the contract and the delivery of the goods must be concurrent conditions unless agreed to otherwise by the parties. If no time for delivery is specified in a contract, the goods must be delivered within a reasonable time. What is "reasonable" is a question of fact and under the SGAs, stipulations as to time will be treated as warranties. Accordingly, a breach of a stipulation as to time will be determined on a case by case basis and will provide a consumer with the remedies generally available for breach of warranty. In such cases, the purchaser is generally not entitled to reject the goods and treat the contract as repudiated.
A recent OECD report has recognized the physical delivery infrastructure in online transactions as one of the "weakest links in any consumer-oriented Electronic Commerce system involving tangible goods": consumers have no assurance that they will receive the products they have purchased electronically.
Amendments to the legislation may not provide an adequate or satisfactory answer to the question of delivery or prompt delivery of goods or services purchased online.
Codes of conduct along industry lines might offer a more practical approach. They might include a provision stipulating that information pertaining to delivery, including the anticipated delay for the delivery of goods or the supply of services, must be provided in every online consumer transaction prior to its conclusion.
Delivery of Goods and Services
Consideration should be given to a legislative amendment or the development by the private sector of codes of conduct or best practices requiring the provision of information on delivery arrangements, including anticipated delays (or a time limit for the performance of the contract) to consumers in online transactions;
10.Redress Mechanisms
Current legislation provides a number of options for consumers who seek redress: they include rescission/cancellation, damages (both general and punitive), specific performance, and injunction depending on the circumstances. While these measures are available to the consumer transacting online, the difficulty or impracticality of enforcing court redress mechanisms significantly limits, in most instances, the value of any of these remedies.
In other words, legal remedies in the context of online transactions are not the most effective means of redress because of the nature of distance selling, and jurisdiction problems.
An option might include the development of codes of conduct or best practices encouraging vendors to provide informal complaint handling services, including the provision of information on the manner in which complaints will be handled. The Australian Report on "Consumer Protection in Electronic Commerce - Draft Principles and Key issues" recommends that vendors commit themselves to effective complaints handling services. Pursuant to the recommendations of this report, vendors would:
1.demonstrate commitment to handling complaints;
2.provide adequate resources for handling customer complaints;
3.publicise online the existence of their customer complaints services;
4.ensure no costs or charges are levied for the handling of a complaint;
5.handle complaints fairly;
6.deal with complaints quickly and throughly;
7.deal with complaints in a manner which would assist any further examination which may be necessary such as referral to a dispute resolution mechanism; and
8.promptly inform the complainant of the outcome.
A system incorporating such guidelines might empower an ombudsperson, some other provincial authority or an impartial Industry-specific authority to hear and resolve consumer complaints. Under such non-legal arrangements, mediation or arbitration would be encouraged and costly legal battles, avoided.
Redress Mechanisms
Consideration should be given to the development by the private sector of codes of conduct of best practices encouraging vendors to provide complaint resolution services, including the appointment of an ombudsperson; vendors would be encouraged to provide prior to the formation of the contract, any information as to how potential complaints will be addressed and handled by the vendor;
ALBERTA FAIR TRADING ACT, CHAPTER F-1.05
MARKETING THROUGH ELECTRONIC MEDIA
Regulations
42 1) The Minister may make regulations respecting the marketing of goods and services through forms of electronic media, such as telephone, television or the Internet, that are specified in the regulations.
(2) Without limiting subsection (1), the Minister may make regulations
(a) specifying the forms of electronic media and the types of marketing to which the regulation applies;
(b) regulating and prohibiting specified activities involved in marketing of goods and services through electronic media;
(c) setting out the rights and remedies of consumers who enter into consumer transactions wholly or partly through a form of electronic media.
California Business and Professions Code
Section 17538
17538. (a) It is unlawful in the sale or lease or offering for sale or lease of goods or services, for any person conducting sales
or leases by telephone, Internet or other electronic means of communication, mail order, or catalog in this state, including, but
not limited to, the offering for sale or lease on television, radio, Internet, or other electronic means of communication or telecommunications device of goods or services which may be ordered by mail, telephone, nternet, or other electronic means of communication or telecommunications device, or for any person advertising in connection with those sales, leases, or
advertisements a mailing address, telephone number, or Internet or other electronic address, to accept payment from or for a
buyer, for the purchase or lease of goods or services ordered by mail, telephone, Internet, or other electronic means of
communication or telecommunications device, whether payment to the vendor is made directly, through the mails, by means
of a transfer of funds from an account of the buyer or any other person, or by any other means, and then permit 30 days,
unless otherwise conspicuously stated in the offering or advertisement, or unless a shorter time is clearly communicated by
the person conducting the sale or lease, to elapse without doing any one of the following things:
(1) Shipping, mailing, or providing the goods or services ordered.
(2) Mailing a full refund or, if payment was made by means of a transfer from an account, (A) crediting the account in the full amount of the debit, or (B) if a third party is the creditor, issuing a credit memorandum to the third party who shall promptly credit the account in the full amount of the debit.
(3) Sending the buyer a letter or other written notice (A) advising the buyer of the duration of an expected delay expressed as a specific number of days or weeks, or proposing the substitution of goods or services of equivalent or superior quality, and (B) offering to make a full refund, in accordance with paragraph (2), within one week if the buyer so requests. The vendor shall provide to the buyer in that letter or written notice a toll-free telephone number or other cost-free method to communicate the buyer's request for a full refund. If the vendor proposes to substitute goods or services, the vendor shall describe the substitute goods or services in detail, indicating fully how the substitute differs from the goods or services ordered.
(4) (A) Shipping, mailing, or providing substitute goods or services of equivalent or superior quality, if the buyer is extended the opportunity to return the substitute goods or services and the vendor promises to refund to the buyer (i) the cost of returning the substitute goods or services and (ii) any portion of the purchase price previously paid by the buyer.
(B) Except as provided in subparagraph (C), a notice to the buyer shall accompany the mailing, shipping, or providing of the substitute goods or services which informs the buyer of the substitution; describes fully how the substitute differs from the goods or services ordered, except that obvious nontechnical differences, such as color, need not be described; and discloses the buyer's right to reject the substitute goods or services and obtain a full refund of the amount paid, plus the cost of returning the substitute goods or services.
(C) The vendor may omit from the notice required by subparagraph (B) a description of how the substitute goods or services differ from the ordered goods or services if the notice otherwise complies with subparagraph (B), and if all the following requirements are complied with:
(i) The vendor maintains at least 100 retail outlets located in at least 20 counties in this state that are open to the public regularly during normal business hours where buyers can order catalog goods, pick them up, and return them for refunds.
(ii) The vendor maintains a toll-free telephone number and provides to each buyer, at the time of the buyer's call, a full description of how substitute goods or services differ from ordered goods or services. The toll-free telephone number shall operate and be staffed at all times during which goods or services normally are available for pick up from the vendor's retail outlets.
(iii) If the buyer picks up substitute goods or services from the vendor's retail outlet, the notice required by subparagraph (B) as modified by this subparagraph is placed on, or attached to, the exterior of the package or wrapping containing the substitute, or is handed to the buyer at the time the buyer picks up the substitute.
(iv) The notice contains a reference number or some other means of identifying the ordered goods or services and the substitute goods or services.
(v) The notice contains the vendor's toll-free telephone number and instructions to the buyer that the buyer may call that number to obtain a full description of how the substitute differs from the ordered goods.
(b) For purposes of paragraphs (3) and (4) of subdivision (a), goods or services shall be considered of "equivalent or superior quality" only if they are (1) substantially similar to the goods or services ordered, (2) fit for the usual purposes for which the goods or services ordered are used, and (3) normally offered by the vendor at a price equal to or greater than the price of the goods or services ordered.
(c) When a buyer makes an initial application for an open-end credit plan, as defined in the Federal Consumer Credit Protection Act (15 U.S.C. Sec. 1682), at the same time the goods or services are ordered, and the goods or services are to be purchased on credit, the person conducting the business shall have 50 days, rather than 30 days, to perform the actions specified in this section.
(d) A vendor conducting business through the Internet or any other electronic means of communication shall do all of the following when the transaction involves a buyer located in California:
(1) Before accepting any payment or processing any debit or credit charge or funds transfer, the vendor shall disclose to the buyer in writing or by electronic means of communication, such as E-mail or an on-screen notice, the vendor's return and refund policy, the legal name under which the business is conducted and, except as provided in paragraph (3), the complete street address from which the business is actually conducted.
(2) If the disclosure of the vendor's legal name and address information required by this subdivision is made by on-screen notice, all of the following shall apply:
(A) The disclosure of the legal name and address information shall appear on
any of the following: (i) the first screen displayed when the vendor's electronic site is accessed, (ii) on the screen on which goods or services are first offered, (iii) on the screen on which a buyer may place the order for goods or services or (iv) onthe screen on which the buyer may enter payment information, such as a credit card account number. The communication of that disclosure shall not be
structured to be smaller or less legible than the text of the offer of the goods or
services.
(B) The disclosure of the legal name and address information shall be
accompanied by an adjacent statement describing how the buyer may receive the
information at the buyer's E-mail address. The vendor shall provide the disclosure information to the buyer at the buyer's E-mail address within five days of receiving the buyer's request.
(C) Until the vendor complies with subdivision (a) in connection with all buyers
of the vendor's goods or services, the vendor shall make available to a buyer and
any person or entity who may enforce this section pursuant to Section 17535
on-screen access to the information required to be disclosed under this subdivision.
(3) The complete street address need not be disclosed as required by paragraph (1) if the vendor utilizes a private mailbox receiving service and all of the following conditions are met:
(A) the vendor satisfies the conditions described in paragraph (2) of subdivision (b) of Section 17538.5, (B) the vendor discloses the actual street address of the private mailbox receiving service in the manner prescribed by this subdivision for the disclosure of the vendor's actual street address, and (C) the vendor and the private mailbox receiving service comply with all of the requirements of subdivisions (c) to (f), inclusive, of Section 17538.5.
(e) As used in this section and Section 17538.3, the following words have the following meanings:
(1) "Goods" means tangible chattels, including certificates or coupons exchangeable for those goods, and including goods which, at the time of the sale or subsequently, are to be so affixed to real property as to become a part of that real property, whether or not severable therefrom.
(2) "Person" means an individual, partnership, corporation, association, or other group, however organized.
(3) "Buyer" means a person who seeks or acquires, by purchase or lease, any goods or services for any purpose.
(4) "Services" means work, labor, and services, including services furnished in connection with the sale or repair of goods.
(5) "Vendor" means a person who, as described in subdivision (a), vends, sells, leases, supplies, or ships goods or services, who conducts sales or leases of goods or services, or who offers goods or services for sale or lease. "Vendor" does not include a person responding to an electronic agent in connection with
providing goods or services to a buyer if the aggregate amount of all transactions with the buyer does not exceed ten dollars ($10).
(6) "Internet" means the global information system that is logically linked together by a globally unique address space based on the Internet Protocol (IP), or its subsequent extensions; and is able to support communications using the Transmission Control Protocol/Internet Protocol (TCP/IP) suite, or its subsequent
extensions, or other IP-compatible protocols; and provides, uses, or makes accessible, either publicly or privately, high level services layered on the communications and related infrastructure described herein.
(7) "Electronic agent" means a computer program designed, selected, or programmed to initiate or respond to electronic messages or performances without review by an individual.
(f) Any violation of the provisions of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding one thousand dollars ($1,000), or by both.