Madam Speaker, it is a pleasure to speak to Bill C-393. I congratulate the member for Sarnia—Lambton for his dedication to the issue of consumer rights and for his perseverance in bringing the legislation before the House.
Parliament has made substantial changes to the way we conduct Private Members' Business. It is fair to say that it was the passion and commitment of backbench MPs, such as the member for Sarnia—Lambton displayed, that inspired parliament to make those changes.
Like many MPs, my constituents have often expressed frustration at unfair marketing practices that require them to expressly decline new services in order to avoid being charged for them. It is also important to remember that people who pay for services they do not want are often the ones who can least afford it, such as the elderly, young people, recent immigrants and those still learning English or French.
The bill regulates federal institutions, but I will show how insidious negative billing can be. For example, I have two daughters in university who are both charged full fees that include extra health care of $250 a year. Unless they line up at a specific time on a specific day in a specific location and prove they have extended health care through our family, they are automatically charged that money. If they line up they get the money back. Since many of the students are on student loans, federal government money is being sucked up by the universities on negative billing. That gets me very excited and that is why I am in favour of the legislation.
Some minority groups and business people have also come forward to argue in favour of negative option marketing. They offer good reason to allow some form of limited negative option selling to continue.
These considerations deserve to be looked at closely, but this debate also offers the opportunity to consider whether negative option selling is the best method for achieving very laudable cultural objectives. If consumers feel manipulated by negative option practices, this can create resentment toward the cultural product the practice is intended to benefit.
However, it is also clear that current negative option practices are generally unfair to consumers. As legislators we have to do a better job of protecting those interests. Bill C-393 is a very good step in that direction.
Negative option billing relies on the legal concept of implied consent. By not responding the consumer is deemed to have given his or her consent. Some might argue that consumer pressure is enough to end negative option practices. However, as Bill C-393 recognizes, most negative option selling occurs in industries where there is little or no competition. Indeed unfair negative option selling is much less likely to occur in competitive markets because of the threat of losing customers.
I would like to see us all have a pair of shoes arrive from Eaton's, for example, and then be billed a month later because we did not send the shoes back and see how long that practice would last.
Bill C-393 deals specifically with federally regulated businesses such as banks, cable and telephone companies. Those that argue “let the market do its work” are ignoring a central fact of Canadian life. In banking, local telephone service and cable television distribution, consumers are faced with limited choices. Companies in these sectors do not always have to consider consumer pressure because their customers have very few options.
Let us look at the furor in 1995, which has been recognized by other speakers, over the negative option billing by Canadian cable companies. This elicited more phone calls into my constituency office than any other issue has ever affected my riding. Thousands of consumers were outraged. Cable companies backed off at the time. Yet only a few short years later there were reports that they were doing it again, using negative option billing in regional markets.
No one on this side of the House wants the federal government to exercise undue influence over the marketplace, but we have to ask ourselves whether negative option billing further concentrates market share with the dominant players.
It may be time for the legislation. Computer technology has made it much easier for businesses such as the banks to quickly and easily offer new services and change existing ones. Industry Canada's office of consumer affairs pointed out in the 1996 discussion paper that negative option marketing had the potential to be an important tool in the financial services sector. To quote the report:
From a negative perspective these new technologies could allow industry to profit by slipping new charges and services past unsuspecting customers.
However, the report also pointed out:
—responsible service providers operating in competitive markets can enable financial institutions to offer better service more easily and with greater efficiency.
The report also gives examples where negative option marketing has worked reasonably well.
Bill C-393 takes these issues into consideration. It recognizes that there may be situations where a consumer would benefit from a negative option billing arrangement. However, for this to be the case, consumers must be able to make informed decisions and express consent.
Bill C-393 proposes certain steps for a negative option marketing practice to be legal. The bill has received the support of the Consumers' Association of Canada, the Public Interest Advocacy Centre and the Insurance Brokers Association of Canada.
There is no doubt that these measures enjoy widespread public support. Consumers feel vulnerable to negative option tactics. When this method of selling is used inappropriately it catches them off guard. They are accustomed to business relationships where no response means no purchase.
They believe they are safe in the understanding that unless they give their consent no one can take money from their account or add a charge to their monthly bill. As I have said, negative option selling is sometimes used responsibly, but in cases where it is used inappropriately consumers are being taken advantage of.
By not responding to a solicitation the consumer is deemed to have given his or her consent. How can the sender be sure that their customer received the solicitation? What if the person is away from home? What if the solicitation simply does not make it into the customer's hands? If it does make it into their hands, how is the consumer approached? Is the negative option included with other information? Is the offer made at the beginning of the document or at the end? Is it clear for everyone who reads it?
These are all good questions. The debate over Bill C-393 offers parliament and the federal government a useful opportunity to explore them.
Since the controversy over negative option billing in the cable industry little has been done to protect consumers from the misuse of this marketing practice. On that occasion and on other occasions consumers have spoken.
They have said they do not want the responsibility of having to thoroughly examine every document they receive in the mail, every business trying to sell them a new product or service.
They do not want to be forced to phone in a response or mail a reply card just to keep their own money. My daughters do not want to have to line up in the cold to get their money back.
There are times when the practice is used appropriately for worthwhile reasons. Let us deal with the misuse of negative option marketing so that consumers can make informed choices.
If consumer resistance is not effective in stopping the misuse of this practice, it is up to the members of this House to act in their interests.
Bill C-393 offers us an opportunity. The member for Sarnia—Lambton should be commended for bringing this issue before the House.