Alberta's New Rules for Internet Sales Lead Canada in Consumer Protection

FOR IMMEDIATE RELEASE

EDMONTON, May 23, 2001 - A brand new provincial regulation establishing specific ground rules for Internet sellers will soon add more protection for Albertans - and, in effect, for all Canadians - who buy goods via the web.

Alberta's Internet Sales Contract Regulation, to take effect on October 15, 2001, was used as a basis for a cross-Canada template to standardize Internet sales legislation. Government Services Minister David Coutts will be in St. John's, Newfoundland on May 24 - 25 where federal, provincial and territorial consumer affairs ministers are expected to ratify the new template.

"With the work we had already done on our own regulation, Alberta was in a good position to contribute to the national standards on consumer protection in e-commerce," said Coutts. "We recognize the Internet is a world without borders and in that world, Albertans need consistent protection beyond our provincial boundaries." The template will lead to harmonized legislation across Canada.

Once the Internet Sales Contract Regulation takes effect, Internet sellers will be required to comply with new standards affecting three different stages of the electronic transaction. These standards will require the seller to:

  • Disclose specific pieces of information to ensure consumers can make informed decisions before they purchase;

  • Provide a copy of the contract, which contains the required information, within 15 days after the consumer enters into the contract; and

  • Allow consumers to exercise cancellation rights in certain circumstances - for example, if a seller fails to disclose the required information or deliver the goods or services on time.

An important mechanism in the regulation will allow the consumer who uses a credit card for purchases to obtain refunds from the credit card company if the Internet seller refuses or ignores the consumer's cancellation.

"It's very important for consumers to know their rights and responsibilities before entering any transaction," said Coutts. "However, we also know online shopping comes with its own unique circumstances that are far different from the traditional shopping experience at the store down the street. As such, the online world needs its own special rules to keep the purchase process smooth for consumers."

The new regulation falls under the Fair Trading Act, which already specifies provisions for cases of misrepresentation and penalties for non-compliance.

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Media enquiries may be directed to:

Shannon Larkins - Alberta Government Services - (780) 415-6051

Highlights of the Internet Sales Contract Regulation

Legislation

  • The regulation comes under the authority of the Fair Trading Act.

  • Penalties for violations of the regulation are in line with the rest of the Fair Trading Act. The Act allows for maximum fines of $100,000, or three times the profit gained by the offence, whichever is greater, and/or up to two years in jail. A business can be ordered to pay restitution.

  • The regulation applies to transactions that exceed $50.

  • The regulation applies to suppliers or consumers in Alberta, as well as contracts in which an offer or acceptance is made in or sent from Alberta.

Disclosure Requirements

  • Before a consumer enters into an Internet sales contract, a supplier must provide information such as:

    • The business name, address and telephone number;
    • A description of the goods or services;
    • An itemized list of the price of goods or services and any associated costs payable by the consumer, including taxes and shipping charges;
    • A description of any additional charges that may apply to the contract, such as customs duties and brokerage fees, whose amounts cannot be reasonably determined by the supplier;
    • The currency in which the amount owing is payable;
    • The terms, conditions and method of payment;
    • The supplier's cancellation, return, exchange and refund policies, if any;
    • The delivery date and delivery arrangements; and
    • Any other limitations or conditions that may apply.

  • In addition, a supplier must provide the consumer with the express opportunity to accept or decline the contract and to correct errors immediately before entering into it.

  • Within 15 days after the consumer enters into the contract, the supplier must provide a copy of the contract to the consumer.

Cancellation Provisions

  • A consumer may cancel a contract within 30 days after entering into the contract in the following circumstances:

    • The consumer does not receive a copy of the contract by mail, e-mail or facsimile, or is unable to download or print a copy of the contract within 15 days after entering into it; or
    • The copy of the contract does not contain the required pre-contractual disclosure information.

  • A consumer may cancel a contract within 5 days after receiving the contract if:

    • The supplier does not fulfill the pre-contractual disclosure requirements; or
    • The consumer is not provided with an opportunity to accept or decline the contract or correct errors.

  • A consumer may cancel at any time if goods or services are not delivered within 30 days of the delivery date specified or an amended delivery date.

  • A consumer may cancel travel, transportation or accommodation services immediately after if those services are not begun on the promised date.

  • Within 15 days of cancellation, a supplier must refund all the money paid by the consumer.

  • Within 15 days of cancellation or receipt of goods, whichever is later, the consumer must return the goods to the supplier.

  • Consumers can request credit card issuers to cancel or reverse credit card charges if the consumer has cancelled and the money has not been refunded by the supplier within 15 days.

  • Consumers can provide cancellation notices through a variety of methods including facsimile, regular mail, e-mail and telephone.

  • The effect of the cancellation operates to cancel a contract, any related sale, any guarantee of money payable, any security given by the consumer, as though the internet sales contract never existed.