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St. John's, Newfoundland and Labrador, Canada

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Revised Statutes of Newfoundland 1990


CHAPTER C-31

AN ACT TO PROVIDE FOR THE PROTECTION OF BUYERS OF CONSUMER GOODS AND FOR THE FAIR DISCLOSURE OF THE COST OF CREDIT

Analysis

1. Short title

2. Definitions

3. Registrar and deputy

4. Powers of registrar

5. Inquiries by registrar

6. Investigation by registrar

7. Advisory committees

8. Payments

9. Registration of lenders

10. Application for registration

11. Address for service

12. Notification of changes

13. Registration

14. Termination of registration

15. False advertising

16. Disclosure of cost of borrowing

17. Limitation of liability

18. Adjustment on payment

19. Advertising by lenders

20. Assignment of negotiable instrument

21. Order to pay indemnity

22. Rights of borrower

23. Regulations

24. Offence

25. Act may not be waived

26. Rights preserved

27. Limitation

28. Certificate as evidence

29. Appeal

30. Day of hearing

31. Act to prevail


Short title

1. This Act may be cited as the Consumer Protection Act.

RSN1970 c256 s1

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Definitions

2. In this Act

(a) "borrower" means a person who receives credit;

(b) "buyer" means a person who purchases goods or services on credit and includes his or her agent;

(c) "cost of borrowing" means

(i) when used in relation to variable credit, the charges that the borrower is required to pay monthly or periodically on the unpaid balance, and

(ii) when used in relation to a form of credit other than variable credit, the amount by which the total sum that the borrower is required to pay where the payments required are made as they become due exceeds

(A) in the case of credit given by the advancement of money, the sum actually received in cash by the borrower and by a person on the borrower's behalf, including official fees and premiums for insurance paid or payable by the lender at the request of the borrower, or

(B) in the case of a sale of goods or services, the cash price of the goods or services, official fees and premiums for insurance paid or payable by the seller at the request of the buyer and the sum remaining under a previous extension of credit in an amount determined under section 18 where the buyer and seller agree that the sum is to be consolidated with it, less the sums credited as a down-payment or in respect of a trade-in or in respect of another matter;

(d) "credit" means credit for which a borrower is required to pay and that is

(i) given under an agreement between a seller and a buyer to purchase goods or services by which all or part of the purchase price is payable after the agreement is entered into, or

(ii) given by the advancement of money,

but does not include credit extended

(iii) on the security of a mortgage of real property,

(iv) in respect of the sale of goods intended for resale, or

(v) for industrial purposes or business purposes of the borrower, as those purposes are defined by the regulations;

(e) "goods" includes tokens, coupons or other documents or things issued or sold by a seller to a buyer that are exchangeable or redeemable for goods or services;

(f) "insurance" means insurance on the life or health of a borrower or buyer, or on property charged to secure payment of the indebtedness of a borrower or buyer to a lender or seller;

(g) "lender" means a person who extends credit;

(h) "minister" means the Minister of Justice;

(i) "official fees" means fees paid or payable to a public official in the province for the filing or registration of an instrument relating to a credit transaction;

(j) "person" means an individual, an association of individuals, a partnership or a corporation and includes his or her agent;

(k) "registrar" means the Registrar of Consumer Protection;

(l) "seller" means a person who is in the business of selling goods or services to buyers and includes his or her agent;

(m) "trade-in" means consideration given by a buyer in a form other than money or an obligation to pay money; and

(n) "variable credit" means credit made available under an agreement by which the lender agrees to make credit available to be used at the option of the borrower for the purpose of the purchase of goods, and includes credit arrangements, commonly known as revolving credit accounts, budget accounts, cyclical accounts and other arrangements of a similar nature.

RSN1970 c256 s2; 1973 No39 Sch C;
1975-76 No58 s4; 1981 c4 Sch C; 1984 c41 Sch C; 1989 c19 Sch B

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Registrar and deputy

3. (1) The Lieutenant-Governor in Council shall appoint a Registrar of Consumer Protection.

(2) The Lieutenant-Governor in Council may appoint a Deputy Registrar of Consumer Protection who, in the absence or incapacity of the registrar, shall perform the functions and exercise the powers of the registrar.

1977 c3 s1

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Powers of registrar

4. Included in the powers, functions and duties of the registrar shall be power to

(a) perform and exercise the functions and duties conferred and imposed upon him or her by this Act and the regulations;

(b) consult and co-operate with the Government of Canada or a department, agency or body under the jurisdiction of the Parliament of Canada or of the Legislature of the province or with lenders and other interested persons and organizations as may be necessary or desirable for carrying out the purposes of this Act;

(c) investigate complaints regarding the operation of this Act or the regulations and regarding credit granting and persons engaged in business as lenders;

(d) undertake, promote or recommend measures for the development, control and direction of consumer protection in the province;

(e) collect, compile, analyze and record the statistical and other information relating to consumer protection that may be useful;

(f) prepare and publish statistics, reports, records, bulletins, pamphlets, circulars and other means of distributing information and advice in relation to consumer protection that may be useful and in relation to other matters that he or she considers desirable in the public interest;

(g) foster, through investigation and research, knowledge of consumer protection and of the means of dealing with conditions relating to their development, control and direction;

(h) conduct studies, inquiries and surveys for the purpose of obtaining information as to who are lenders in the province, concerning their methods and practices of carrying on business, and keep himself or herself informed of developments or changes in the business of credit granting;

(i) subject to the approval of the Lieutenant-Governor in Council, engage solicitors, accountants, actuaries and other professionally or technically qualified persons for the purposes of this Act;

(j) do other things that are necessary or desirable for carrying out the purposes of this Act; and

(k) exercise and discharge the other functions and duties that the Lieutenant-Governor in Council assigns to him or her.

RSN1970 c256 s5

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Inquiries by registrar

5. For the purpose of carrying out his or her powers, functions and duties under this Act, the registrar has the powers, privileges and immunities that are or may be conferred upon a commissioner under the Public Inquiries Act, including the power to take evidence under oath or affirmation.

RSN1970 c256 s6

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Investigation by registrar

6. (1) The registrar, or a person authorized by him or her in writing, in this section referred to as an "investigator", may investigate and inquire into a matter the investigation of which the registrar considers expedient for the administration of this Act.

(2) An investigator may at reasonable times enter premises so long as it is reasonably necessary to determine compliance with this Act and may demand the production of and inspect the books, documents, correspondence and records that the investigator believes on reasonable grounds are in respect of the person about whom the investigation is being made including a lender or a person who the investigator has reasonable grounds to believe is carrying on the business of a lender.

(3) Where the registrar believes on reasonable grounds that a person has contravened this Act or regulations, an investigator may with a warrant issued under subsection (4) at a reasonable time enter upon the business premises and may investigate, inquire into and examine the affairs of the person in respect of whom the investigation is being made and into the books, documents, correspondence and records in relation to the person, including, a lender or a person who the investigator has reasonable grounds to believe is carrying on the business of a lender.

(4) A Provincial Court judge or justice of the peace who is satisfied by information upon oath or affirmation that there are reasonable grounds for believing that there is on business premises anything that there are reasonable grounds to believe will give evidence with respect to an offence under this Act may issue a warrant authorizing an investigator to enter and search those premises and to make the inquiries and copies of books, documents, correspondence and records that are considered necessary, subject to the conditions that may be specified in the warrant.

(5) The owner or person in charge of the premises referred to in this section and a person found there shall give an investigator reasonable help to enable the investigator to carry out his or her duties and functions under this section and shall provide the information that the investigator may reasonably require.

(6) Where an action or proceeding is taken against an investigator for anything done by him or her under this Act or the regulations and the court before which the action or proceeding is taken is satisfied that there was probable cause for the action of the investigator and that it was not malicious, a verdict or judgment shall not be given against the investigator for more than $0.05 damages or for costs of suit.

RSN1970 c256 s7; 1985 c11 s54

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Advisory committees

7. (1) The minister may establish those advisory committees that he or she considers necessary or desirable and appoint the members, and the members of those committees are entitled to be paid reasonable travelling and living expenses from and to their ordinary places of residence in the course of their duties.

(2) The Lieutenant-Governor in Council may authorize the payment of a daily allowance or remuneration to some or all of the members of an advisory committee.

RSN1970 c256 s8

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Payments

8. Payments required to be made by or on behalf of the Crown in carrying out this Act or the regulations shall be paid by the Minister of Finance, on the request of the minister, out of the Consolidated Revenue Fund of the province.

RSN1970 c256 s9

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Registration of lenders

9. (1) A person shall not carry on business as a lender in the province unless he or she is registered under this Act.

(2) A person shall not publish a statement or representation that he or she is registered under this Act.

RSN1970 c256 s10

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Application for registration

10. (1) A person shall apply for registration as a lender upon a form provided by the registrar and shall send along with the application form the fees prescribed by the regulations.

(2) The registrar shall register a lender who satisfies the requirements of this Act and the regulations.

(3) A registration remains in effect until it is withdrawn by the registered person or is suspended or cancelled under this Act.

(4) The registrar shall not refuse to grant registration to a lender or cancel the registration of a lender without giving the lender an opportunity to be heard.

RSN1970 c256 s11

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Address for service

11. (1) An applicant for registration shall state in the application an address for service in the province, and a notice given under this Act or the regulations shall be considered to be sufficiently served if delivered or sent by registered mail to the person at the address for service stated in his or her application for registration, unless that person has notified the registrar in writing of a change of address for service under section 12, in which case the notice shall be sufficiently served if delivered or sent by registered mail to the person at the latest address for service of which the registrar has been so notified.

(2) Where a notice referred to in subsection (1) is sent by registered mail, it is considered to be served on the day it is deposited in the post office by the sender of it.

RSN1970 c256 s12

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Notification of changes

12. A registered lender shall, within 5 days of the change, notify the registrar in writing of

(a) a change in his or her address for service; and

(b) a change in partners, in the case of a partnership.

RSN1970 c256 s13

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Registration

13. The registrar may suspend or cancel the registration of a person

(a) for the breach of a term or condition upon which the registration was granted;

(b) where the registrar has reason to believe that the person has violated or failed to comply with this Act or the regulations or an order or direction given under this Act or the regulations; or

(c) where he or she considers it to be in the public interest to do so.

RSN1970 c256 s14

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Termination of registration

14. (1) Where the registrar believes that a registered lender is not carrying on business in the province, he or she may send to the lender a registered letter inquiring whether the lender is carrying on business in the province and stating that, where an answer to the letter is not received within 1 month from the date of the letter, the registration of the lender will be cancelled and a notice of cancellation will be published in the Gazette.

(2) Where the registrar either receives an answer from the lender to the effect that he or she is not carrying on business as a lender or does not within 1 month after sending the letter receive an answer to it, the registrar may cancel the registration of the lender and publish notice of the cancellation in the Gazette.

(3) The registrar may cancel the registration of a lender where he or she is satisfied that the lender has died.

(4) The registrar may strike off the register the name of a lender that is a corporation where he or she is satisfied that the corporation has been dissolved or has been struck off the register under the Corporations Act.

(5) The registrar may strike off the register the name of a lender who has become bankrupt.

RSN1970 c256 s15; 1986 c12 Sch; 1987 c38 Sch B

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False advertising

15. Where, in the opinion of the registrar, a person registered under this Act is making false, misleading or deceptive statements relating to the extension of credit in an advertisement, circular, pamphlet or similar material, he or she may order the immediate cessation of the use of the material.

RSN1970 c256 s16

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Disclosure of cost of borrowing

16. (1) Except as provided in subsection (2), a lender shall provide to the borrower, or to the borrower 1st executing the agreement extending the credit where that agreement is being executed by 2 or more borrowers jointly or jointly and individually, before extending the credit a clear statement in writing showing

(a) the sum expressed as one sum in dollars and cents, of

(i) in the case of credit given by the advancement of money, the sum actually received in cash by the borrower and by a person on his or her behalf plus official fees and premiums for insurance paid or payable by the lender at the request of the borrower, or

(ii) in the case of a sale of goods or services, the cash price of the goods or services;

(b) where the lender is a seller, the sums to be credited as a down-payment or in respect of a trade-in or in respect of another matter;

(c) where the lender is a seller, the sum that is the difference between the sum stated under subparagraph (a)(ii) and the sum that is the total of the sums referred to in paragraph (b);

(d) the sum remaining under a previous extension of credit in an amount determined under section 18 that the buyer and seller agree is to be consolidated with the extension of credit in respect of which the statement is given;

(e) the amount of official fees paid or payable at the request of the borrower;

(f) the amount of premiums for insurance paid or payable by the lender at the request of the borrower;

(g) the total, where the lender is a seller, of the sums stated under paragraphs (c), (d), (e) and (f);

(h) the cost of borrowing expressed as one sum in dollars and cents;

(i) where the cost of borrowing exceeds $10, the percentage that the cost of borrowing bears to the sum stated

(i) under subparagraph (a)(i) where the lender is not a seller, and

(ii) under paragraph (g) where the lender is a seller

expressed as an annual rate of the unpaid balance of the obligation which percentage shall be calculated and expressed in the manner prescribed in the regulations; and

(j) the basis upon which additional charges are to be made in the event of default.

(2) A lender extending variable credit shall

(a) before extending variable credit, provide the borrower with a clear written statement setting out the cost of borrowing

(i) as an annual percentage or a scale of annual percentages, calculated and expressed in the manner prescribed by the regulations, that the borrower is required to pay monthly or periodically on the unpaid balance, subject to a minimum dollars and cents charge, and

(ii) expressed in dollars and cents in a schedule of amounts of outstanding balances and the corresponding charges for the cost of borrowing; and

(b) not less frequently than every 5 weeks during the extension of credit, provide the borrower with a clear written statement showing, in respect of the period covered by the statement

(i) the outstanding balance in the account of the borrower at the beginning of the period,

(ii) the amount of each extension of credit to the borrower during the period and the date of it,

(iii) the total sum received from or credited to the account of the borrower during the period,

(iv) the cost of borrowing, expressed as one sum in dollars and cents, charged during the period,

(v) the outstanding balance in the account of the borrower at the end of the period, and

(vi) the statement referred to in paragraph (a).

(3) The statement required to be provided under subsection (1) or paragraph (2)(a) may be contained in the principal document or instrument relating to the credit transaction or in a separate document.

(4) Where credit is extended and no time or date for payment or repayment is specified at the time the credit is extended, the cost of borrowing may be disclosed as a statement of the percentage rate for 1 year on the credit extended and as the amount in dollars and cents that would be payable by the person to whom the credit was extended if payment or repayment be required to be made 1 year after the credit was extended.

RSN1970 c256 s17

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Limitation of liability

17. (1) A borrower is not liable to pay a lender as the cost of borrowing a sum or at a rate that exceeds the sum or rate disclosed in a statement given under section 16 by more than the tolerances permitted by the regulations.

(2) Nothing in this Act shall have the effect of depriving a lender of, or interfering with, the right of a lender to collect from a borrower

(a) the principal of a debt, loan or credit; or

(b) the cost of borrowing at the lesser of the sum or rate shown in a statement required by section 16.

RSN1970 c256 s18

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Adjustment on payment

18. Where a sum remaining to be paid under an agreement for credit is paid in full before the term of the agreement has expired,

(a) the borrower is entitled to a rebate in respect of the cost of the borrowing; and

(b) the lender is entitled to a part of the cost of borrowing

in an amount determined in the manner prescribed by the regulations.

RSN1970 c256 s19

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Advertising by lenders

19. (1) A lender shall not publish, whether orally or in print, or by radio or television broadcast, or otherwise, a representation of a charge for credit in terms of a percentage rate that does not disclose the full cost of borrowing, stated as an annual percentage rate, expressed in the manner required by section 16.

(2) Unless otherwise and to the extent permitted by the regulations, where a lender represents in an oral statement, printing, broadcast or other publication, terms of credit other than that referred to in subsection (1), the lender shall also include all other relevant terms of the credit transaction, including

(a) the sum to be actually received in cash by the borrower or the actual cash price of the goods;

(b) the amount of the down-payment;

(c) the amount of each instalment; and

(d) the number of instalments required to repay the total indebtedness including the cost of borrowing.

(3) A lender shall not represent his or her charge for credit unless the representation includes the full cost of borrowing and is expressed in the manner required by section 16.

RSN1970 c256 s20

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Assignment of negotiable instrument

20. (1) Where a lender assigns a negotiable instrument given to secure credit, the lender shall deliver to the assignee with the negotiable instrument a copy of the statement required by section 16 and, where the lender is a seller, a copy of the contract of sale.

(2) An assignee of a negotiable instrument who reassigns the instrument shall deliver to his or her assignee the statement and contract of sale received by the assignee in respect of the instrument.

(3) Where an assignee of a negotiable instrument to which subsection (2) applies is entitled to recover on the instrument from the maker, the maker is entitled to be indemnified by an assignor of the instrument who has not complied with subsection (1) or (2).

RSN1970 c256 s21

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Order to pay indemnity

21. (1) Where an assignor of a negotiable instrument is convicted for a contravention of section 20, the Provincial Court judge making the conviction may order the convicted person to indemnify the maker under subsection 20(3).

(2) Where an indemnity order is made under subsection (1) in favour of a person who is or becomes liable under a judgment of a court to an assignee of the negotiable instrument in respect of which the indemnity order was made, the person entitled to the indemnity may file the indemnity order in the court in which the judgment was issued.

(3) Upon the filing of the indemnity order, the registrar or clerk of the court shall issue a default judgment in favour of the person entitled to be indemnified and against the person required by the indemnity order to give the indemnity, and the amount of the default judgment shall be the amount of the judgment referred to in subsection (2) and costs together with the costs of issuing the default judgment, or a smaller amount that the person entitled to the indemnity by application requests.

(4) Upon application, a judge of the court in which the default judgment is issued may set aside the default judgment or may redetermine the amount of the indemnity or make an order of reference for the purpose or may vary the amount of the default judgment.

RSN1970 c256 s22; 1979 c38 s7

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Rights of borrower

22. (1) The assignee of rights of a lender has the same obligations, liabilities, and duties as the lender, and is subject to a defence that the borrower has against the lender.

(2) This Act applies to an assignee of a right of a lender.

(3) The liabilities of an assignee under this section are limited to the total amount owed to the lender by the borrower at the date of the assignment.

1977 c3 s2

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Regulations

23. (1) The Lieutenant-Governor in Council may make regulations

(a) providing for the registration of lenders or a class of lenders and for the issue of certificates of registration;

(b) prescribing the forms of application for registration and the information to be supplied by applicants;

(c) prescribing the terms and conditions of registration or a type or class of registration;

(d) requiring sellers or a class of sellers to be bonded in the form and terms and with the collateral security that are prescribed and providing for the forfeiture of security and the disposition of the proceeds;

(e) respecting the suspension or cancellation of registration;

(f) exempting goods or services or a class of them from the application of this Act or the regulations;

(g) exempting persons or a class of persons from the application of this Act or of the regulations;

(h) providing for the approval of forms of agreements, assignments and other instruments and documents to be used by lenders;

(i) requiring a lender or class of lenders to submit forms of credit agreements, instruments and other documents used by him or her or them to the registrar for approval;

(j) requiring the use by lenders of credit agreements, instruments and other documents that are in a form approved by the registrar and prohibiting the use by a class of lenders of the agreements, instruments or documents that are not in a form approved by the registrar;

(k) prescribing the manner in which the cost of borrowing stated as a percentage shall be calculated and expressed by a class of lenders, which may be different for different classes of lenders or for different types of businesses carried on by lenders;

(l) prescribing the manner of determining the apportionment of the cost of borrowing for the purposes of section 18;

(m) regulating forms of advertising by lenders relating to the extension of credit;

(n) defining, for the purposes of subparagraph 2(d)(v), industrial purposes and business purposes;

(o) prescribing the form and content of records relating to lending to be kept by lenders and the length of time for which they must be kept;

(p) prescribing reports and returns to be made by lenders or a class of lenders and requiring them to be made to the registrar;

(q) providing for the holding of inquiries into the operation of this Act and into a charge or complaint that a person has contravened this Act or the regulations, or has made a false statement in a form, return, account or statement required to be completed or made under this Act or the regulations, or into another matter arising in the administration of this Act, and providing that the person holding the inquiry shall have some or all of the powers that are or may be conferred upon a commissioner under the Public Inquiries Act including the power to take evidence under oath or affirmation;

(r) prescribing forms and providing for their use and requiring the information in a form to be verified by affidavit;

(s) prescribing fees for registration, searches, certificates and other matters or services rendered or supplied by the registrar; and

(t) generally, to give effect to the purpose of this Act.

(2) Regulations made under subsection (1) may be made with retroactive effect.

RSN1970 c256 s23; 1977 c3 s3

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Offence

24. (1) A

(a) person who contravenes this Act or the regulations or an order or direction given under this Act or the regulations, or makes a false statement in an application, form, return, account, record, statement, instrument or other document completed or made under this Act or the regulations or under an order or direction given under this Act or the regulations; and

(b) director or officer of a corporation who knowingly concurs in a contravention of this Act or the regulations or an order or direction given under this Act or the regulations or in the making of a false statement in an application, form, return, account, record, statement, instrument or other document completed or made under this Act or the regulations or under an order or direction given under this Act or the regulations

is guilty of an offence and liable on summary conviction to a fine of not less than $2,000 and in default of payment of a fine or in addition to a fine, to imprisonment for a period not exceeding 6 months.

(2) Notwithstanding subsection (1), where a corporation is convicted of an offence under subsection (1), it is liable to a fine of not more than $25,000.

RSN1970 c256 s24

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Act may not be waived

25. This Act applies notwithstanding an agreement or waiver to the contrary.

RSN1970 c256 s25

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Rights preserved

26. The rights of a buyer or borrower under this Act are in addition to the rights of the buyer or borrower under another Act or by the operation of law, and nothing in this Act shall be construed to derogate from those rights.

RSN1970 c256 s26

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Limitation

27. A prosecution under this Act or the regulations may, and shall, be started within 3 years from the date on which the offence is alleged to have been committed.

RSN1970 c256 s27

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Certificate as evidence

28. A statement as to

(a) the registration or non-registration of a person;

(b) the filing or non-filing of a document or material required or permitted to be filed with the registrar;

(c) the time when the facts upon which proceedings are based 1st came to the knowledge of the registrar; or

(d) another matter pertaining to the registration, non-registration, filing or non-filing or to the person, document or material

purporting to be certified by the registrar is, without proof of the office or signature of the registrar, receivable in evidence as, in the absence of evidence to the contrary, proof of the facts stated there in an action, proceeding or prosecution.

RSN1970 c256 s28

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Appeal

29. (1) A person dissatisfied with a decision, order or direction of the registrar may appeal to a judge of the Trial Division.

(2) Where a person proposes to appeal under subsection (1), that person shall, within 30 days after notice to him or her of the decision, order or direction of the registrar, serve on the registrar a written notice of his or her intention to appeal.

(3) A notice of appeal served under subsection (2) shall be signed by the appellant or by his or her solicitor or agent, and, in the notice, the grounds of the appeal shall be set out, and the appellant shall file a copy of the notice in the office of the Registrar of the Supreme Court.

RSN1970 c256 s29; 1974 No57 Sch C;
1986 c42 Sch A

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Day of hearing

30. (1) The appellant shall, not less than 14 days before the hearing of the appeal, serve upon the registrar a written notice of the day appointed for the hearing.

(2) The judge shall hear the appeal and the evidence brought forward by the appellant and the Crown in a summary manner and shall decide the matter of the appeal, and he or she may confirm, vary or set aside the decision, order or direction.

(3) The registrar shall produce before the judge on the hearing of the appeal all papers and documents in his or her possession affecting the matter of the appeal.

(4) The costs of the appeal are in the discretion of the judge, and the judge may make an order respecting them in favour of or against the Crown and may fix the amount.

RSN1970 c256 s30

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Act to prevail

31. Where another Act or a regulation made under another Act conflicts with this Act or the regulations or an order or direction given under this Act or the regulations, this Act and the regulations and an order or direction given under this Act or the regulations shall prevail.

RSN1970 c256 s31

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