On December 8, 2016, legislation to ban the expiration of reward points received Royal Assent in Ontario. While not yet proclaimed into force, Bill 47 – Protecting Reward Points Act (the “Act”) – will amend Ontario’s Consumer Protection Act, 2002 (the “CPA”) to prohibit expiry of consumer reward points based on the passage of time alone, and will render void any provision to the contrary in a consumer agreement.
Consumer frustration was widely reported over the plans of some large loyalty program providers to amend their program terms and have reward points expire over time. The first legal responses came in the form of consumer class actions filed against each of Pharmaprix, Aeroplan and LoyaltyOne in recent years (without a final adjudication against any company). Bill 47, a private member’s bill, was first introduced in October but quickly picked up momentum to pass in under two months.
The Act will amend the definition of consumer agreement under the CPA to capture contracts where a supplier provides reward points to a consumer who purchases certain goods or services. It provides for two possible scenarios under which reward points may expire: (i) with notice to the consumer , at termination of the program in accordance with the program’s terms; or (ii) where there is a reason for expiry in addition to just the passage of time. Both will be the subject to limitations imposed by regulations, on which consultation is expected early in 2017.
Notably, the Act will have retroactive effect. Points that expire after October 1, 2016 must be reinstated to the consumers within 15 days of the Act’s coming into force.
If you have questions on how this Act will impact your business, or if you are interested in participating in the anticipated consultation process on the regulations, contact Catherine Bate.
