Transparency in pricing, credit and leasing: New consumer protections obligations for merchants in Quebec

On November 7, 2024, the National Assembly of Québec adopted An Act to protect consumers against abusive commercial practices and to offer better transparency with respect to prices and credit ("Bill 72"). Bill 72 aims to regulate certain commercial practices to better protect Quebec consumers, mainly concerning prices, credit contracts and long-term leasing contracts.

Among the new legislative requirements, which are incorporated into the Consumer Protection Act (the "CPA") and its regulations, we find the following:

• new measures regarding credit contracts;
• protections for consumers entering into long-term leasing contracts, similar to those offered in credit contracts;
• a prohibition on making the conclusion of a contract for a motor vehicle conditional on entering into a credit or long-term leasing contract;
• requirements relating to the price of food products;
• an increase of the indemnity offered to consumers when the price of a product at the time of payment exceeds the advertised price;
• a framework for certain practices related to tips;
• the introduction of a regime limiting consumers’ liability in the event of unauthorized use of their demand deposit account; and
• protective measures regarding contracts concluded with an itinerant merchant.

It should be noted that several of these new measures are already in effect, while others will come into effect gradually or on dates set by the government.

To better understand the implications for merchants, we will briefly outline some of these new requirements, without providing an exhaustive overview.

Credit contracts

Bill 72 requires merchants who enter into open credit contracts to hold a permit issued by the Office de la protection du consommateur.

Bill 72 also introduces significant changes to credit charges and credit rates, including the following.

• Charges related to security must be considered to form part of credit charges.
• Fees for registering or accessing a public register of rights (government fees) will no longer be considered when calculating the credit rate. These fees can therefore be billed separately to consumers.
• Membership or renewal fees payable under a credit card contract will not be taken into account in calculating the credit rate, provided that those fees are payable only once a year.

In addition to credit charges, merchants can now claim from consumers the charges paid following a financial institution’s refusal to accept a cheque or other payment instrument given by the consumer, as well as the charges paid following the inability to receive a transfer of funds from the consumer, when this inability is not caused by the merchant.

All applications for open credit must now indicate the credit limit desired by the consumer and if this information is not provided, merchants must reject the application. Merchants are prohibited from granting the consumer a credit limit higher than the one requested by the consumer.

Furthermore, merchants may not allow the consumer to make transactions that exceed the requested credit limit, unless specific conditions are met, including the merchant sending an electronic prior notice to the consumer.

If the parties to a credit contract wish to amend certain provisions of the contract, the amendment must be evidenced in a new contract or in a rider to the original contract. An increase of the credit rate or credit charges may be made only at the consumer’s request, and in such a case, the new contract or the rider must contain specific information.

Long-term leasing contract

Bill 72 now requires that any type of long-term leasing contract be evidenced in writing and contain the information prescribed by the CPA or its regulation. Namely, a statement as to whether or not the contract includes a purchase option or is a leasing contract with a guaranteed residual value required.

A long-term leasing contract may be cancelled without cost or penalty, at the discretion of the consumer, within two days following that on which each of the parties is in possession of a duplicate of the contract. However, this period is extended to ten days in the case of a high-cost long-term leasing contract, as determined by regulation.

Similarly to credit contracts, any amendments to the provisions of a long-term leasing contract must be evidenced in a new contract or in a rider to the original contract. The statements of accounts provided to the consumer must now respect the terms and conditions prescribed by regulation for credit contracts.

In the case of a contract that includes an option to purchase the leased goods or of a contract of lease with guaranteed residual value, the merchant may not exercise the right of repossession without the court’s permission if the consumer has paid at least half of their obligation.

Finally, a merchant who enters into a high-cost long-term leasing contract must hold a permit issued by the Office de la protection du consommateur.

Contract to acquire a road vehicle

Bill 72 now prohibits merchants from making the conclusion of a contract for a road vehicle conditional on entering into a credit contract or long-term leasing contract or conditional on acquiring other goods or services, except when subscribing an insurance is required in connection with a credit contract or a long-term leasing contract.

Accurate pricing policy

Bill 72 amends the Order in Council respecting the Policy on accurate pricing for merchants who use optical scanner technology by increasing the indemnity offered to consumers from $10 to $15 when the price of a good at the time of payment exceeds the advertised price, in instances where merchants use the optical scanner technology. In such a case, a good valued at $15 or less will be given to the consumer free of charge, while a discount of $15 will be applied to any good with a value exceeding this amount.

In the case of food products intended for human consumption, a merchant must indicate whether the amount of the QST or GST will be added to the price of the food product at the moment of payment. Changes regarding the display of food prices are also provided in the Regulation respecting the application of the Consumer Protection Act (“RCPA”).

Framework for certain practices related to tips

Bill 72 also regulates practices related to tipping. Any proposal for the payment of a tip presented to a consumer must now be calculated on the pre-tax price and displayed in a consistent manner, without inciting the consumer to favour one amount over another, and must include an option allowing the consumer to determine the tip amount.

Regime limiting consumers’ liability in the event of unauthorized use or fraud of their demand deposit account

The CPA already offers a protection regime for consumers in the event of unauthorized use of a credit card. However, there were no comparable measures for demand deposit accounts (checking account). Bill 72 addresses this gap by introducing a new regime capping consumer’s liability at $50 in case of unauthorized use or fraud of a demand deposit account, except in cases of gross negligence on the part of the consumer in safeguarding their means of identification giving access to their demand deposit account.

Prohibited business practice applicable to itinerant merchants

Itinerant merchants may not offer to enter into or conclude with a consumer a credit contract, a long-term leasing contract of goods, a contract concerning heating or air-conditioning unit, a decontamination services contract, an insulation services contract or any other type of contract that may be determined by regulation. However, it should be noted that several exceptions are outlined in the RCPA in connection with this prohibition.

Unless certain circumstances specified in the RCPA apply, itinerant merchants must also wait ten days (cancellation period) after receiving the contract before providing the specified service in the contract, including the installation of a good.

For any questions regarding the applicability of the CPA or your obligations as a merchant, please do not hesitate to contact the authors.