Madam Speaker, I am pleased to speak to Bill C-393, an act to amend the Competition Act.
The hon. member for Sarnia—Lambton who introduced the bill has done Canadian consumers a great service in putting it forward. This legislation would amend the Competition Act to restrict the practice of negative option marketing in Canada.
We are all familiar with the irritation of opening telephone and cable bills or other statements and seeing that we have been charged for a service we did not ask for, we do not need and we do not want.
When we ask about what is going on we are given the impression that we are at fault. We are told we should have read the notice and should have sent in a form saying no.
That is how negative option marketing works. Negative option marketing is a sales strategy by which consumers are required to expressly refuse a product or service to avoid receiving and paying for it.
To put it another way, if there is no action to refuse the service the recipient has bought it. I am sure there are examples where negative option marketing works well and for the benefit and convenience of both the customer and the supplier.
There are book and record clubs where the customer understands and is happy to receive the monthly selection unless the reply card is sent. The key to successful negative option arrangements is making sure the consumer is well informed, has accurate information and is not taken by surprise.
This points to why so many Canadians find negative option marketing offensive. When they enter into an agreement with a service provider for a particular package of services they do not expect that the company would assume it can charge without their consent. They are surprised to learn that companies think it is okay to keep switching and adding services and raising the charges until the customer says stop.
Negative option marketing reverses the customer-seller relationship. It imposes on the customer the requirement to react to avoid the sale. It can take advantage of those of us who with busy lives may find ourselves less vigilant with our financial affairs.
An example can be made with day to day banking. Many of us like to convenience of paying our bill by automatic debit. We do not always take the time to go through the statements at the end of the month. Weeks later when we do notice the charges have crept up there is a good chance that we will let it go. After all, it is only a few dollars. It is not worth the hassle. That is how negative option marketing can take advantage of the average Canadian. Intentionally or not, it can also take advantage of vulnerable consumers.
The member's initiative allows the House to debate this issue. He should be applauded for this. As part of this debate I would like to suggest a few improvements to Bill C-393 that the member may wish to consider.
I first propose that the bill focus on sectors of clear and exclusive federal jurisdiction. This would mean making negative option marketing a reviewable matter with applications with specified regulated industries. The bill would then be broad enough to encompass the major players while minimizing the potential for a perception of overlap with provincial jurisdiction.
Next, in its current form Bill C-393 contemplates making negative action marketing a criminal offence. Members may recall that in September of last year the House approved Bill C-20, an act which also amended the Competition Act. One of the innovations of that was the creation of a civil court process to allow the Competition Bureau to deal more expeditiously with cases involving misleading advertising and deceptive marketing practices.
The government's position is that negative option marketing rather than being subject to criminal law and processes should be a matter reviewable by the civil courts.
Members may recall that in the 35th parliament the same hon. member sponsored Bill C-216, an act to amend the Broadcast Act. That bill was amended on third reading in the Senate to respond to concerns of its possible effects on the viability of French language broadcasting services. We will want to ensure that Bill C-393 is crafted so as to anticipate and resolve these types of concerns.
Another issue is notification. The bill contains provisions requiring companies to send their customers a notice at least once a month for three consecutive months before they can charge for a new service. In the current form it appears that these provisions would require a company to complete the triple notification process and prevent it from charging for the service for three months, even if the customer had agreed to it and signed up for the service right away. I think this is an issue we may wish to review.
The bill addresses several of the consumer issues raised in the context of a much broader review of the financial sector. As drafted, the bill has the potential for conflict with the existing provisions of the Bank Act that deal with services charges and notice requirements. We will undoubtedly address these issues further as debate continues on this bill.
Bill C-393 is a worthwhile initiative that merits debate in the House. It applies to certain federally regulated enterprises, notably those subject to the Broadcast Act, the Telecommunications Act and the Bank Act. It has the potential to touch each Canadian consumer who subscribes to cable TV, uses a telephone or has a bank account.
We look forward to collaborating with the hon. member on his private member's bill. We want to demonstrate our support to consumers and give a positive response to the many Canadians who find negative option marketing offensive and unreasonable.
With respect to the financial sector, the task force on the future of the Canadian financial services sector produced a report that made consumer issues a major preoccupation of its 124 recommendations released to the Minister of Finance in September of last year.
The House of Commons finance committee and the Senate banking committee have studied the report and also conducted public hearings. The two committees supported many of the consumer measures contained in the report and provided some additional recommendations. The government is currently reviewing the advice of these three bodies and will be setting out its response as soon as possible.
The bill addresses several of the consumer issues raised in the context of a much broader review of the financial sector. As drafted, the bill has the potential of conflict with existing provisions of the Bank Act dealing with service charges and notice requirements.
As the bill proceeds through the House and through committee at various stages we should consider how best to resolve the conflicts between the bill's provisions and the existing consumer protection provisions contained in the Bank Act as we debate this bill in the House to make sure we have responded to the hon. member for bringing this bill forward.