On January 19, 2018, the Government of Ontario issued a proposal to amend existing gift card rules under the Consumer Protection Act, 2002 (Ontario). The existing gift card rules, among other things, prescribe certain disclosure requirements and impose limitations on fees and expiry dates. The proposed amendments are intended to clarify the scope of such rules. Comments on the proposed amendments are due February 8, 2018.
The amendments propose to clarify as follows:
- Prepaid cards issued by a financial institution are exempt – The amendments clarify that the gift card rules do not apply to a prepaid card issued under an agreement between a cardholder and a “financial institution” (defined as a bank, authorized foreign bank, federal or provincial credit union or trust company or loan corporation) relating to the use of such card, as these type of cards are generally already subject to similar requirements (such as the Prepaid Payment Products Regulations under the Bank Act (Canada) for example). This exemption is similar to exemptions already existing in BC and Alberta and to a more limited extent, Québec.
- Gift cards rules also apply to gift cards not purchased as gifts – The amendments clarify that the gift card rules do also apply to gift cards not purchased as gifts, i.e. cards purchased by a cardholder for her or his own use.
- Reloadable gift cards are not exempt – The amendments clarify that the gift card rules do apply to gift cards that can be reloaded.
The proposal states that the amendments are intended to clarify “confusion in the marketplace about how the rules apply to certain types of cards, like prepaid credit cards”.
By Ana Badour
McCarthy Tétrault is a Canadian law firm that offers a full suite of legal and business solutions to clients in Canada and around the world. They deliver integrated business, litigation, tax, real property, and labour and employment solutions through offices in Vancouver, Calgary, Toronto, Montréal, Québec City, New York and London, UK.
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