Project Summaries 2010-2011 - Union des consommateurs

6226 Saint-Hubert Street
Montreal, Quebec
H2S 2M2
Tel.: 514-521-6820
Fax: 514-521-0736

1. Canadian Perspectives on Cloud Computing and Consumers


Information is becoming more and more virtual. People can now use applications online instead of installing them on their computers. They can also save documents on servers in third countries, and access them anywhere in the world. All of these functionalities are called cloud computing applications. However, these applications raise many privacy, copyright and consumer protection issues.

Here are some of these issues:

  • How can consumers maintain control of their information when they choose to use such applications?
  • Knowing that servers may be in foreign countries, how can consumers be sure of knowing the applicable frameworks?
  • How can consumers protect themselves against unauthorized circulation of data?
  • Do cloud computing user licences comply with Canadian privacy, consumer protection and copyright legislation? For example, do users automatically relinquish all rights in documents they develop, alter or store on an external server?
  • What recourse do consumers have if their data is lost or improperly used?

This research project will make it possible to assess the current situation in Canada, and to identify the main issues that cloud computing applications raise.

By studying the contract terms and conditions of certain cloud computing applications, as well as relevant legislative provisions, Union des consommateurs (UC) will seek to determine whether these contract terms and conditions comply with Canadian legislation governing privacy, copyright for users of these applications, and consumer protection rights.

Expected Outcome

This research should enable UC to make recommendations to improve consumer protection relating to the issues and dangers of using such cloud computing applications, as well as the resource available to consumers. If necessary, the research findings will provide the information required to alert the proper authorities responsible for protecting private information and to urge them to act intelligently as circumstances warrant.

2. Consumers and Access to Justice: One-Stop Shopping for Consumers?


Consumer rights advocacy organizations continually worry about serious problems in terms of access to justice for consumers. Small claims court, class action suits, legal insurance, procedural reforms, alternative dispute resolution methods, pro bono services of provincial bars - there are many measures designed to give Canadians easier access to justice, but problems remain. Academics and authors continually seek and propose solutions to the problems consumers face in resolving disputes. However, mediation, arbitration and other usual means of facilitating dispute resolution apply only imperfectly to consumer disputes. Many studies still identify major obstacles in access to justice: lack of information, rising costs, long delays, inadequate procedures, fairness, and so on. However, few texts and reports propose comprehensive and definitive ways to remedy problems in terms of access to justice for consumers.

Through research on arbitration, UC found that some foreign jurisdictions had successfully included this practice as a dispute resolution method, by establishing a court with an extremely broad mandate ranging far beyond usual forms of arbitration. More and more jurisdictions thus tend to vest the same court with a wide range of powers and conflict resolution methods, to allow consumers easier access to justice.

The recurring issue of access to justice for consumers leads us to try to find a comprehensive solution:

  • Could centralizing all means of recourse in a single court represent an effective, comprehensive solution to problems in terms of access to justice in matters relating to consumer rights?
  • What are the characteristics of models adopted in other countries for this type of court focusing on consumer disputes?
  • What are their advantages and disadvantages?
  • Could this type of court represent an appropriate and applicable solution in Canadian provinces experiencing problems in access to justice for consumers?

Expected Outcome

Based on its research findings, UC could propose measures to centralize consumer rights and resources to ensure greater access to justice.

3. Ending abusive clauses in consumer contracts


Consumer contracts abound with clauses highlighting the imbalance between merchants and consumers. Under statutory provisions, such as section 8 of Quebec’s Consumer Protection Act, many contract clauses may be deemed abusive or are the focus of specific regulations. However, provisions concerning abusive clauses are hard to apply before the courts. They also do not resolve the persistent problem of the existence of many abusive clauses in contracts.

Consumer and research associations have conducted many studies focusing on abusive clauses. Moreover, the vast majority of consumer problems reported by the media stem from contract clauses of an abusive nature, such as amending a contract unilaterally. Most jurisdictions acknowledge the scope of the problem. In Quebec, the Government has decided to establish a regulatory authority to identify prohibited clauses in consumer contracts. Foreign jurisdictions (such as the European Union, Great Britain, France, Germany and Australia) have adopted various approaches to dealing with abusive clauses. These approaches include developing lists of clauses deemed to be abusive, or establishing specific procedures for timely handling of complaints.

The issues are as follows:

  • How can Canada manage the problem of abusive clauses, so that consumers are properly protected and the market is regulated?
  • What criteria do jurisdictions use to identify the types of clauses that should be listed?
  • What methods are used to prohibit clauses?
  • What types of tests are advocated to determine whether a clause is abusive?
  • What measures are implemented to ensure compliance with the prohibition of a clause?
  • What are the advantages and disadvantages of regulatory procedures?
  • Does Canada address this issue comprehensively, effectively, consistently?

Expected Outcome

This research will enable UC to determine the various ways of regulating abusive clauses in Canada and elsewhere, and to identify their advantages and disadvantages. If the research uncovers weaknesses in governing abusive clauses, the findings should enable UC to define and propose solutions.

4. Minors, contracts and consequences


Minors today have greater access to goods and services, are more knowledgeable and have more revenue to purchase goods and services. This access is magnified by the ability to obtain goods and services at a distance. Minors enter into contracts every day when they buy music online, or purchase and cell phones and other electronic devices. Consumer associations regularly receive calls from parents. Huge invoices for sending and receiving text messages, buying goods online, participating in contests - there are many instances where minors enter into consumer contracts and get into hot water.

Minors seem to lack understanding of the legal framework. Entering such contracts raises the following issues that warrant consideration:

  • Can a minor enter into a contract?
  • Can a contract be enforced against a co contractor?
  • Can a guardian cancel a contract?
  • Can a minor repudiate a contract?
  • What happens when minors misrepresent their age?
  • Are guardians liable for minors?
  • Can minors sue and be sued?
  • Are minors properly protected across Canada?

These issues are even more confusing for merchants and consumers, since it is not always clear in what circumstances minors enter into a valid consumer contract. The framework varies from one jurisdiction to another. Should the framework be harmonized?

This research will enable UC to identify the legislative measures that provide the framework for the ability of minors to enter into contracts. UC the opportunity to determine what kind of advice and information is available from consumer associations, and from government bodies responsible for applying legislation to protect consumers.

Expected Outcome

Based on a clear vision of the ability of minors to enter into a contract, the research findings will enable UC to propose ways to remedy problems identified, particularly in terms of knowing and harmonizing rules.

5. New Payment Methods: Is Canada Ready?


Businesses and corporations in the financial and technological sectors continually innovate, giving consumers and merchants access to new payment methods: cell phone payment, biometric payment, USB payment, and so on. Some of these new payment methods are now widely used, such as cell phone payment in Asia. Others are only in the initial stages of being implemented, such as biometric payment in the United States and Europe. Some of these payment methods are not yet available in Canada, but will be in the near future. The three major telecommunications networks (Bell, Telus and Rogers) have joined forces to offer cell phone cash transfer services.

The issues are as follows:

  • What are the advantages and disadvantages of these new payment methods? What do they cost consumers and merchants?
  • When consumers use these new payment methods, are they protected to the same degree as when they use traditional payment methods (theft, privacy, and so on)?
  • Where these new payment methods have become widespread, have issues been raised that Canada could address before they cause problems here?
  • Are existing legislative measures suited to future payment methods?

This study will outline the new payment methods available or being tested in Canada and worldwide (costs, penetration rates, advantages, disadvantages, risks, and so on), to compare them with existing payment methods. A study of existing frameworks, in Canada and elsewhere, will make it possible to assess whether a suitable framework can be provided for these new payment methods. This study will thus make it possible to identify issues or problems that these new payment methods might raise, and to see what precautions might be taken to protect consumers, in Canada as in other countries.

Here are some of the new payment methods that UC will study:

  • Cell phone payment;
  • Biometric payment;
  • weXpay;
  • Contactless payment systems.

Expected Outcome

The results obtained will enable UC to outline payment methods that are likely to appear in Canada, the issues they raise for consumers and possible solutions where necessary. The results will also contribute to discussions by consumer groups and governments in this regard.

6. Ensuring Proper Representation for Consumers: Model Rules for Participation Costs Awarded by Economic Regulation Authorities


Economic regulation authorities are common in North America. In sectors such as energy and telecommunications, several provinces and states have established boards to regulate (monitor) the market, and balance the often diametrically opposed interests of suppliers and distributors, and those of consumers. Industrial groups are generally well represented on these boards. They have the necessary resources, expertise and financial means to ensure that they are properly represented.

What about consumer rights advocacy groups and interest groups in general? It is agreed that these groups must be allocated the resources they need to ensure full representation. Is this always the case? Do authorities in the sectors mentioned have similar rules for prescribing/awarding participation costs? How about other areas of economic regulation?

This study will focus on the awarding of participation costs by economic regulation authorities. It will also focus on procedures governing the awarding of costs to consumer groups, and interest groups generally, that appeal to these authorities in various Western countries, and to compare them with the situation in Canada.

Expected Outcome

The study should initially enable UC to identify current areas in which costs are awarded, as well as appropriate standards and practices for awarding participation costs, to suggest areas for improvement for economic regulation authorities in Canada.