TORONTO, May 14, 2019 /CNW/ - On May 13, 2019, the Ontario Superior Court granted judgment in a ground-breaking class action on behalf of Ontario consumers of "gift cards" who were charged illegal fees.
Toronto law firms Sotos LLP and Goldblatt Partners LLP jointly represent Representative Plaintiff, Joyce Bernstein, against Peoples Trust Company ("Peoples Trust"). Bernstein brought the case on behalf of consumers who bought or were given prepaid "credit" cards issued by Peoples Trust. These are cards, including the popular Vanilla Visa and Vanilla MasterCard, which are often sold alongside other gift cards and can be used to purchase goods and services from merchants accepting Visa and MasterCard. The case alleged that these prepaid cards were "gift cards," under the Consumer Protection Act, and as such, were subject to rules that prohibit companies from seizing "expired" funds or charging various fees. Superior Court Justice Paul Perell agreed, and found that during the relevant period, PTC had improperly seized $15,330,000 in illegal fees and "expired" funds.
The judge went on to award $1.5 million against Peoples Trust in the form of punitive damages, finding that Peoples Trust's conduct was "an intentional violation of the legislation and conduct that displays ignorance, carelessness, or serious negligence…"
"This is an important victory for Ontario consumers. The Court found that not only must illegal fees be returned to consumers, but that an additional penalty was appropriate to serve as a deterrent," said Louis Sokolov, class counsel with Sotos LLP, "this sends a strong message to other corporations – obey consumer protection laws."
"This case demonstrates the importance of consumer class actions. Most consumers can't afford to fight a giant like Peoples Trust for $35 in illegal fees," added Nadine Blum of Goldblatt Partners LLP. "But those small amounts seized from consumers can add up to millions of dollars of ill-gotten gains." However, Justice Perell declined to award any damages in respect of the other types of cards at issue in this class action - the General Purpose Reloadable cards, which are often sold at payday loan stores like Money Mart. He concluded that these prepaid cards were "financial products" and not "gift cards" subject to the Consumer Protection Act.
Both parties have 30 days within which to appeal the decision.
If the case is not appealed, the next step will be for the Court to determine the appropriate method or procedure for distributing the funds to consumers.
SOURCE Sotos LLP
For further information: contact Louis Sokolov (Sotos LLP) at 416-572-7316 or Nadine Blum (Goldblatt Partners LLP) at 416-979-6971.