Law Talk: A new and improved you: Personal development service agreements
From karate clubs to dance lessons, personal
development service agreements have
become increasingly popular in Ontario.
While most consumers who purchase these
services do not encounter any problems,
sometimes a business will go bankrupt or
fail to deliver a service as promised. This
article will explain how these agreements
are regulated, and what options you have if
you run into problems with such an agreement.
How are personal development service agreements regulated?
Most agreements for services offered by fitness clubs, dance studios, martial arts studios or modelling and talent agencies are "personal development service agreements" regulated under Ontario's Consumer Protection Act, 2002 (CPA) if the cost is more than $50. There are exceptions: agreements with non-profit or co-operative organizations, private clubs, charitable or municipal organizations, golf clubs, or any agency of the Province are not covered by the CPA.
What are the requirements for these agreements?
The CPA has several requirements. The term of the agreement cannot exceed one year. Initiation fees may not be more than twice the annual membership fee, and you cannot be charged more than one initiation fee. You must have the option to pay the initiation fees and membership dues in monthly instalments, and the cost to pay in installments may not exceed the lump sum fee by more than 25 per cent. You must be given at least 30 days' (but not more than 90 days) advance notice of any automatic renewal date for the agreement. If you are not given notice and the service provider renews the agreement, you have the right to cancel your membership and demand the return of any money paid. The agreement may not be changed without your knowledge and your consent to the changes. You do not have to pay for or accept goods or services that you did not request. If you have already paid for unrequested goods or services, you may demand a refund within one year of payment by providing notice to the service provider.
May I cancel a personal development service agreement?
Under the CPA, you have a 10-day "cooling off" period and may cancel the agreement and receive a full refund within 10 days of receiving a written copy of the agreement, or of the day all services in the agreement are available (whichever is later). You do not have to give a reason for cancelling, but you are required to notify the supplier of your intent to cancel. It is a good idea to cancel in writing and keep a copy so that you have proof that you cancelled. If the provider does not give you a copy of the agreement, you may cancel at any time within one year of the date of the agreement. You may also cancel a pre-purchased membership you bought for a club that wasn't yet open if the opening is delayed. Finally, the CPA provides that if the supplier does not provide goods or services with a minimum degree of acceptable quality, the agreement may be rendered void.
What if a provider refuses to refund my money after cancellation?
The service provider is required to refund any payment made under the agreement once it is cancelled. If they fail to do so, first try resolving the issue directly with the provider. Be sure to outline your complaint in writing and to keep proof of delivery of your complaint, as well as of any interaction or communications with the provider. If you are unable to reach a satisfactory outcome, you may try to resolve your problem by reporting it to Ontario's Ministry of Consumer Services. The Ministry can impose fines and/or imprisonment if it finds that the provider violated the CPA.
For more information on consumer rights, complaints and cancellations related to personal development services, please visit the Ministry of Consumer Services website at http://www.sse.gov.on.ca/mcs/en/Pages/default.aspx, or call them at 1-800-889-9768. In addition, you can find more information about consumer protection topics at any time in a series of Community Law School webinars archived online at www.yourlegalrights.on.ca/training-topic/consumer-law. Be empowered, and stay tuned.
This column is brought to you by Community Law School (Sarnia-Lambton) Inc., and Community Legal Services and Pro Bono Students Canada at Western University, with financial support from the Law Foundation of Ontario. It provides legal information only. The information is accurate as of the date of publication. Laws change frequently so we caution readers from relying on this information if some time has passed since publication. If you need specific legal advice please contact a lawyer, your community legal clinic, Justice Net at 1-866-919-3219 or the Law Society Referral Service at 1-800-268-8326.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
How are personal development service agreements regulated?
Most agreements for services offered by fitness clubs, dance studios, martial arts studios or modelling and talent agencies are "personal development service agreements" regulated under Ontario's Consumer Protection Act, 2002 (CPA) if the cost is more than $50. There are exceptions: agreements with non-profit or co-operative organizations, private clubs, charitable or municipal organizations, golf clubs, or any agency of the Province are not covered by the CPA.
What are the requirements for these agreements?
The CPA has several requirements. The term of the agreement cannot exceed one year. Initiation fees may not be more than twice the annual membership fee, and you cannot be charged more than one initiation fee. You must have the option to pay the initiation fees and membership dues in monthly instalments, and the cost to pay in installments may not exceed the lump sum fee by more than 25 per cent. You must be given at least 30 days' (but not more than 90 days) advance notice of any automatic renewal date for the agreement. If you are not given notice and the service provider renews the agreement, you have the right to cancel your membership and demand the return of any money paid. The agreement may not be changed without your knowledge and your consent to the changes. You do not have to pay for or accept goods or services that you did not request. If you have already paid for unrequested goods or services, you may demand a refund within one year of payment by providing notice to the service provider.
May I cancel a personal development service agreement?
Under the CPA, you have a 10-day "cooling off" period and may cancel the agreement and receive a full refund within 10 days of receiving a written copy of the agreement, or of the day all services in the agreement are available (whichever is later). You do not have to give a reason for cancelling, but you are required to notify the supplier of your intent to cancel. It is a good idea to cancel in writing and keep a copy so that you have proof that you cancelled. If the provider does not give you a copy of the agreement, you may cancel at any time within one year of the date of the agreement. You may also cancel a pre-purchased membership you bought for a club that wasn't yet open if the opening is delayed. Finally, the CPA provides that if the supplier does not provide goods or services with a minimum degree of acceptable quality, the agreement may be rendered void.
What if a provider refuses to refund my money after cancellation?
The service provider is required to refund any payment made under the agreement once it is cancelled. If they fail to do so, first try resolving the issue directly with the provider. Be sure to outline your complaint in writing and to keep proof of delivery of your complaint, as well as of any interaction or communications with the provider. If you are unable to reach a satisfactory outcome, you may try to resolve your problem by reporting it to Ontario's Ministry of Consumer Services. The Ministry can impose fines and/or imprisonment if it finds that the provider violated the CPA.
For more information on consumer rights, complaints and cancellations related to personal development services, please visit the Ministry of Consumer Services website at http://www.sse.gov.on.ca/mcs/en/Pages/default.aspx, or call them at 1-800-889-9768. In addition, you can find more information about consumer protection topics at any time in a series of Community Law School webinars archived online at www.yourlegalrights.on.ca/training-topic/consumer-law. Be empowered, and stay tuned.
This column is brought to you by Community Law School (Sarnia-Lambton) Inc., and Community Legal Services and Pro Bono Students Canada at Western University, with financial support from the Law Foundation of Ontario. It provides legal information only. The information is accurate as of the date of publication. Laws change frequently so we caution readers from relying on this information if some time has passed since publication. If you need specific legal advice please contact a lawyer, your community legal clinic, Justice Net at 1-866-919-3219 or the Law Society Referral Service at 1-800-268-8326.
Editorial opinions or comments expressed in this online edition of Interrobang newspaper reflect the views of the writer and are not those of the Interrobang or the Fanshawe Student Union. The Interrobang is published weekly by the Fanshawe Student Union at 1001 Fanshawe College Blvd., P.O. Box 7005, London, Ontario, N5Y 5R6 and distributed through the Fanshawe College community. Letters to the editor are welcome. All letters are subject to editing and should be emailed. All letters must be accompanied by contact information. Letters can also be submitted online by clicking here.
