Archived—Project Summaries 2006-2007 - Option consommateurs
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1. Access to Financial Services for People Living in the Far North and the Northwest Territories
During the last 50 years, the lifestyle of people in the Far North has changed to the point that it almost mirrors our urban lifestyle. The Inuit now have access to consumer goods that are available in the "South" (cars, all-terrain vehicles, electronics, furniture, etc.). They also have access to financial products such as personal loans, lines of credit and credit cards. But the number of financial products available to these people is disproportionate to the actual physical access to financial institutions. In the territory of Nunavik, for example, only the CIBC has set up branches in just 14 of the territory's villages.
Option consommateurs is proposing to prepare an accurate and objective profile of the financial services available to residents of the Far North (Nunavik and Nunavut) and the Northwest Territories, as well as of the financial knowledge and skills of the residents of these regions.
The objectives of the study are as follows:
- Prepare an accurate and objective profile of the financial services available to residents of the Far North (Nunavik and Nunavut) and the Northwest Territories;
- Outline the specific problems experienced by consumers in the North in terms of access to financial services (level of savings, costs, travel, Internet access, etc.);
- Assess the financial knowledge and skills of the residents of these regions;
- Draw up a profile of available resources in these regions mandated to inform residents of their rights in terms of financial services;
- Assess measures that could be adopted to improve accessibility to financial services for these residents and make recommendations.
In order to achieve these objectives, Option consommateurs plans to proceed as follows:
Firstly, through information and statistical research and interviews with stakeholders, Option consommateurs will compile a comprehensive list of the various financial services offered in these territories and their cost. The information research component will also include a review of literature on access to financial services for Aboriginal people in other countries such as Australia and one of the member countries of the Arctic Council (Denmark, Finland, Iceland, Norway, Russia, Sweden or the United States). Option consommateurs will then organize a minimum of four discussion groups with residents of the Far North (at least two in Nunavik) in order to identify the specific problems related to access to financial services and to assess their knowledge of the actual cost of the various financial services they use and the different financial products available to them. Option consommateurs will analyze the data collected through information and statistical research, interviews and discussion groups. Option consommateurs will prepare a report profiling the situation, outlining the various approaches used during the project and providing potential solutions in order to improve the financial services offered to residents of the Far North and the Northwest Territories as well as their financial knowledge and skills, if required. The report will also include recommendations to financial sector stakeholders in order to ensure that consumers receive adequate information and protection.
"We have noticed that, more and more often, companies are adding mandatory arbitration clauses to their contracts. The goal of companies such as Rogers, Fido or Dell is to avoid having consumers involved in a legal dispute launch a class action against them. This new way of drawing up contracts and stipulating mandatory arbitration is of concern to several consumer associations. According to Option consommateurs, this trend is troubling since it diminishes access to justice for consumers who are seeking to settle a consumer-related legal dispute and diminishes the credibility of our justice system.
In response to this trend, a new mechanism for resolving legal disputes has appeared in the United States: class arbitration. This mechanism exists mainly in California. The American Arbitration Association, a private arbitration centre, has adopted a minimum acceptable standard for consumer arbitration: the Consumer Due Process Protocol. These guidelines govern this new dispute resolution mechanism known as class arbitration. Should a similar standard be adopted in Canada?"
Option consommateurs is proposing to analyze and assess the possibility of a hybrid dispute resolution process i.e. class arbitration that would combine the advantages of the class action judicial process and the arbitration process. The goal of this project is to explore a new approach to justice. Option consommateurs will also establish various basic conditions to be met in order for this collective arbitration to improve dispute resolution for Canadian consumers. Option consommateurs may have the opportunity to work with the Centre for the Law of Business and International Trade commerce international at the Université de Montréal's Faculty of Law in order to carry out this project.
In addition, the project will allow Option consommateurs to develop greater expertise in the area of dispute resolution as it relates to consumers, to analyze the advantages and disadvantages of class arbitration and to make recommendations to various stakeholders; consumer associations, the Barreau du Québec, the Canadian Bar Association and the federal and provincial justice departments.
In terms of methodology, Option consommateurs plans to:
- Review Canadian and American literature on alternative methods of consumer dispute resolution and, in particular, class arbitration.
- Compile a list of the major class arbitration cases in the United States.
- Develop an analytical grid in order to assess the advantages and disadvantage of these processes for consumers, businesses and the justice system.
Finally, Option consommateurs will develop recommendations that will be communicated to various stakeholders.
"In order to make justice more accessible, insurance companies are now offering their clients insurance products to cover a portion of their legal costs in the case of litigation. The arrival of this new insurance coverage raises several questions. In particular, does the cost of legal insurance really provide for least-cost resolution? Does this plan create a form of discrimination between people who are better off financially and the poorest people in our society?"
The goal of the project is to measure the impact of legal insurance on accessibility to justice for Canadian consumers. In order to achieve this goal, Option consommateurs plans to:
- Carry out information research in order to collect data on various regulations that exist in Canada, the United States and Australia in this sector.
- Conduct a qualitative analysis of the various insurance contracts from the major insurance companies in Canada that offer legal insurance for consumers.
- Meet with key industry stakeholders, as well those within government and consumer associations.
- Analyze the data collected during the course of the study in order to answer such questions as the following:
- What types of problems do consumers encounter in this area?
- What is the magnitude of the problems encountered by consumers?
- Is there any existing provincial or federal legislation in this area or, if not in related areas?
- Are there ways of doing business that exist elsewhere in the world that increase consumer protection and improve accessibility to justice?
- How can we improve the quality of consumer information and protection with regards to legal insurance?
- What are the views held by governments, the industry and consumer associations regarding the issues being examined?
- Hold discussion groups with individuals who have used legal insurance during legal proceedings.
- Prepare a report profiling the situation and outlining the various activities carried out during this project. This report will also include recommendations to ensure that consumers are better protected this area, if required.
4. Making It Easier For People With Low Literacy Skills to Understand the Nutrition Facts Table and the New Canada Food Guide
"This project focuses on a specific situation that emerges from Canadian statistics, which shows that, on the one hand, obesity and chronic and cardiovascular disease are a growing problem and, on the other, that 48% of Canadian adults 16 years and older do not have the minimal skill level to meet the requirements of daily life and work. We can therefore draw a link between literacy and health. In fact, the Canadian Public Health Association has made this link one of its objectives by focusing on literacy as an essential factor in providing fair access to health services."
Option consommateurs is therefore looking into the appropriate and effective channels of communication that will allow these Canadians to not only benefit from the information found in the next edition of Canada's Food Guide to Healthy Eating and to also become better equipped to understand the detailed information provided on nutrition labels — the most recent version came into effect on December 12, 2005.
Initially, Option consommateurs is proposing to identify and to consult the various stakeholders, based on their missions and objectives, whose expertise and skills in this area could be a key part of this research. These stakeholders would be those dealing directly with literacy in the health and nutrition fields but who are also interested in issues related to the link between literacy and health. Option consommateurs will also identify community organizations and stakeholders that regularly deal with clients with low literacy skills in order to present awareness and education workshops on the new Canada Food Guide and nutritional labelling information. Consumers with low literacy skills will then have to be consulted in order to find out about their experience with the new Nutrition Facts table and Canada's Food Guide. Option consommateurs will then put together an inventory of existing communication tools and analyze their effectiveness, with the help of partners and stakeholders. Thirdly, Option consommateurs will identify effective communication tools, methods and channels for people with low literacy skills in order to raise awareness and educate them so that they truly understand nutritional information and to improve their ability to make informed choices during their next visit to the grocery store.
According to Option consommateurs, this research will allow for the development of concrete and contextualized recommendations that will help improve accessibility to and understanding of the information found in the new version of Canada's Food Guide and the Nutrition Facts table. This information is essential in order for people with low literacy skills to make informed choices when it comes to their health.
"During the last 20 years, both the world of consumption and consumers have changed significantly. Young people are now a targeted clientele for companies. This trend is especially apparent within the cellular telephone industry. Companies are developing cellular telephones based on the interests of young people. For example, this summer Rogers Wireless introduced a cellular telephone for young Canadians between the ages of 8 and 12; it is very easy to use and parents program the calls. For many young people, a cellular telephone is an essential. In fact, in 2004 in Canada, close to 50% of young people between the ages of 15 and 19 owned as cellular telephone. In addition, the market share that the industry garners when young people purchase a cellular telephone totals $1.25 billion a year."
The goal of this project is to identify and analyze the business practices and marketing and advertising strategies used by cellular telephone companies to reach out to and attract young consumers. Option consommateurs then hopes that this data will be used to provide young consumers with the knowledge they need to consume responsibly.
In order to achieve these objectives, Option consommateurs plans to:
- Carry out information research on business practices that target young people, print and electronic advertising, scientific literature, and others.
- Conduct a legal analysis of various Canadian, American, and European laws that deal with protecting young people and limit business practices aimed at young people.
- Conduct interviews with various stakeholders to gather their opinions, especially youth associations, cellular telephone companies and marketing firms.
- Develop a field study in order to gain a better understanding of the business practices adopted by cellular telephone companies when dealing with young people.
- Hold at least two discussion groups (in Quebec and Ontario) with young people to discuss their views about the business practices of cellular telephone companies and how these practices impact their purchases. This phase of the study will include interview with young consumers between the ages of 12 and 24. To accomplish this, Option consommateurs will contact high schools, youth centres and colleges and will post the notice in these facilities and in student newspapers. Option consommateurs will also call upon consumer associations and organizations that deal with young people.
- Prepare a final report presenting the analysis of the data collected through documentary research on Canadian, American and European business practices and legislative frameworks, and during discussion groups and interviews with various stakeholders. Option consommateurs feels that it will then be able to assess what measures could be adopted in order to better protect young consumers or oversee business practices, if required. This final report will also include recommendations to various applicable stakeholders.
"Frequently used in the United States over the past few year, numerous American class actions have implemented settlement vouchers, that is, the beneficiaries of these settlements receive as compensation a voucher that can be exchanged for a product from the business being sued. Yet these settlements have been widely criticized. In fact, some American stakeholders have accused lawyers who negotiate this type of settlement of receiving more money in professional fees than is paid to the aggrieved consumers. Others question the terms and conditions imposed for these settlements and feel that they limit the number of consumers who can receive compensation. This trend, which first began in the United States, has made its way north to our side of the border. In fact, in the past few years, more and more companies that are being sued in Canada are proposing this type of settlement. Thus class actions against Johnson & Johnson, Maytag, Easyhome (Rent to Own) and Shell have been settled this way."
The goal of this research is to identify the advantages and disadvantages of settlement vouchers for all parties involved, whether they be consumers, the companies being sued, the lawyers for the plaintiff as well as the defence, or the justice system itself.
In order to achieve these objectives, Option consommateurs plans to proceed as follows:
- Review literature on class actions and particularly on settlement vouchers in order to clearly identify the various problems that these vouchers create.
- Compile a list of the main settlement vouchers that have been issued in Canada and the United States.
- Develop an analytical grid that Option consommateurs will use for the main settlement coupons. Option consommateurs will then try to assess the quality of these settlements and show the advantages and disadvantages for all parties involved.
- Carry out comparative research in order to outline the normative frameworks that exist in the United States, Canada and Australia that pertain to class action settlements and, if applicable, to settlement vouchers.
- Finally, Option consommateurs will consult key stakeholders and prepare a report that will include specific recommendations for the improvement of consumer protection in this area, if required. The main results of this research, as well as the recommendations, will then be widely distributed to relevant stakeholders and all Canadian consumers.
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