97% of all postal credit offers studied by the CACQ do not conform to the
requirements of the Consumer Protection Act

Results of a pan-Canadian research project on postal credit offers

MONTREAL, Nov. 26, 2010 /CNW Telbec/ - Nearly all the credit offers reviewed do not respect the law in Quebec. This is what the "Postal Credit Offers: Between Dream & Reality" study completed by the "Coalition des associations de consommateurs du Québec" (CACQ) has revealed. The pan-Canadian study has analysed a total of 193 postal credit offers that were received by 30 Canadian consumers. Collection of the postal offers took place between June and December 2009. The final percentage breakdown per province was as follows: 33% from Quebec, 20% from Ontario, 17% from the Maritimes, 17 % from the Western provinces, and 13 % from British Colombia. The study focused on the legal and promotional aspects of the postal credit offers. 

Barely acknowledged laws
In Canada, 67% of the offers studied do not conform to the requirements of the Cost of Borrowing Regulations taken from the Bank Act. According to Mrs. Clémence Gagnon, CACQ spokesperson, "if this rate of non-conformance appears important at first glance, the CACQ considers that the new federal regulations should be able to resolve the majority of the issues." Mrs. Gagnon also adds: "However, we are more concerned with conformance to the provincial regulations. While some provinces have enacted specific laws regarding credit solicitation, non-conformance is almost a current practice." In Ontario, 71% of the offers analysed do not conform to Ontario laws. In Quebec, the rate of non-conformance with the Consumer Protection Act reaches 97%. In the opinion of the CACQ, those results are cause for concern given that those regulations are meant to offer some added protection to the consumers. "We were not expecting such overall negative results," Clémence Gagnon says. In Quebec, for example, 58% of offers do not conform because they incite the consumers to procure goods or services using credit, which is an illegal practice. "It's a shame since this is the only Quebec regulation that specifically focuses on preventing indebtedness," adds Mrs. Gagnon.

The CACQ is also concerned about other major problems, despite the presence of new federal regulations that came into effect since the completion of the study. One of those problems is the lack of sufficient regulations and the absence of monitoring activities and sanctions. "In order to make an informed decision, the consumer must have access to all the elements needed to understand the terms, the stakes, and his obligations. Only by putting laws into effect will the government be able to ensure consumers receive that minimal level of protection. However, even the strictest law will be to no avail if sanctions against non-conformance are not enforced," adds Mrs. Gagnon.

Aiming to ban postal credit solicitation
"The CACQ has been appealing to the government of Quebec to ban all forms of credit solicitation for 7 years now," Mrs. Gagnon points out. The results obtained from this study only serve to strengthen this pronouncement. "We must discuss this very seriously since the government of Quebec is now working on a bill meant to modernize the provisions of the Consumer Protection Act regarding credit, " Mrs. Gagnon says. The CACQ reiterates its request to the government to ban postal credit solicitation. "It represents the most efficient form of law for the consumer, and the simplest and easiest one for the government to control," Mrs. Gagnon concludes.

To download the complete report of this study, "Postal Credit Offers: Between Dream & Reality," go to www.cacq.ca. 

The CACQ received funding from Industry Canada's Contributions Program for Non-Profit Consumer and Voluntary Organizations. The CACQ also wishes to thank the "Office de la protection du consommateur" for its financial aid during this project. The opinions expressed in this report do not necessarily represent those of Industry Canada, the government of Canada, the "Office de la Protection du Consommateur," or the government of Quebec.

The winner of the 2009 prize from the "Office de la protection du consommateur" for its credit and debt awareness campaign "Dans la marge jusqu'au cou!" The "Coalition des associations de consommateurs du Québec" (CACQ) represents a group of twenty-two consumer associations from across Quebec and aims to promote and defend consumer interests.

CACQ members
ACEF de la Péninsule, ACEF de l'Outaouais, ACEF de Québec, ACEF des Basses-Laurentides, ACEF des Bois-Francs, ACEF du Haut-St-Laurent, ACEF du Sud-Ouest de Montréal, ACEF, Rimouski-Neigette et Mitis, ACEF Rive-Sud de Montréal, APIC Côte-Nord, CRIC de Port-Cartier, CIRCCO, Fonds Communautaire Des Chenaux, GRAPE, SAAB de Charlevoix-Est, Service budgétaire Lac-Saint-Jean-Est, SBC de Chicoutimi, SBC de Jonquière, SBP de La Baie/Bas Saguenay, SBP des Sources, SBP de Saint-Félicien, Solutions Budget Plus.

For further information:

Martine Robergeau, Development and Communications Agent, CACQ
514-362-8623 office, 514-432-0137 cell
[email protected]  www.cacq.ca

Mrs. Clémence Gagnon, spokesperson, will be available for interviews conducted in French.