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Consumer & Retail Advisor

Ontario Enacts Ban on the Expiry of Rewards Points

Posted in Legislation
Ana BadourJames ArcherClaire GowdyLara Nathans

On December 6, 2016, Bill 47 – Protecting Rewards Points Act (the “Act”), amending Ontario’s Consumer Protection Act, 2002 (the “CPA”), received Royal Assent.  The Act was first introduced on October 20 as a private member’s bill.

The primary effect – and stated purpose – of the Act is to prohibit the expiry of rewards points under consumer agreement due to the passage of time. Any provision to the contrary in any consumer agreement will be rendered void, with retroactive effect to October 1, 2016, such that all points purporting to expire after October 1, 2016, will need to be reinstated. However, subject to what may be provided in the regulations – yet to be issued – a rewards program may still be terminated and accumulated rewards may expire if the agreement so provides.

Now that the definition of “consumer agreements” under the CPA has been broadened to include agreements respecting rewards points, there could be other implications for these types of agreements entered into after the Act comes into force, under other provisions of the CPA. As well, the terms and conditions of such future rewards programs could be impacted as the Act could have much broader reach beyond the reward point expiry bank. In particular, the Act contemplates the issuance of regulations relating to (i) the transfer of rewards points among consumers, including upon death, (ii) inactivity of rewards points, and (iii) the termination of rewards points programs.

The Act is not yet in force, which will follow the issuance of regulations. Consultations are expected to take place in 2017 in respect of the regulations.

Given the national scope of rewards programs, Ontario’s intervention in this area could be very disruptive.

We are monitoring the process of the Act and the regulation. Stay tuned for a summary of developments as they arise.