Madam Speaker, I am pleased to participate in the debate on Bill C-276 sponsored by the member for Sarnia—Lambton who has been quite active on the whole question of negative option billing or marketing.
Canadians will recall the national event involving a cable company which tried to introduce additional services. These services were going to be charged automatically unless the customer let it be known that they did not want the services. This is the whole concept of negative option billing. As members will recall, the consequence was the uprising of consumers who said that this was unfair, this was not right. The cable company withdrew its proposal and the consumer won.
This bill is about consumer protection. There is a very good reason why it should be characterized as that and why it should be before the House. In my experience in business, as a member of parliament and as an observant consumer, it is my view that consumers need help.
How many times have we seen people go to an automatic teller machine to withdraw $20? How many times have we seen someone go to McDonald's and use a debit card to buy a Big Mac? People do not realize the cost of a transaction. It is pervasive.
How many times have people received in the mail a credit card that was unsolicited? How many times have we seen someone at the till look at the onion sheets of bad credit cards? Why would all of these unsolicited cards be given if there was not, as there is in gambling, a winner? Considering the number of cards that are now issued in the credit card industry, this business is very profitable, despite the fact that many accounts go bad and losses are incurred.
The fact is that consumers need protection because they are not alert. Consumers are distracted by life, by their own interests, and they have been conditioned to assume that everything will take care of itself. Many people do not pay their full Visa balance or Mastercard balance and they are charged interest. It is only a few dollars. It is not a big deal. But with millions of consumers all having the same lazy consumer habits, the sponsors of the credit cards receive a tremendous profit, even though there are losses.
If an individual does not have a special arrangement with their bank, they could be paying anywhere from 30 cents to 75 cents every time they use their debit card. People think that the debit card is convenient because they do not require cash in their pocket. The card is pushed into a machine, a number is keyed in and the machine pays exactly the amount owing. Individuals do not have to worry about cash. Consumers think that is convenient.
A cashier at a large grocery store told me that the smallest purchase made at the store by a customer using a debit card was the purchase of a newspaper. It was 50 cents for the newspaper, but there was a 75 cent charge for the use of the debit card. It makes absolutely no sense.
Consumers need to be educated. They have to be educated about the tied value of money. They have to be educated about the fact that there is a transactional cost no matter what we do, whether we are using debit card machines, green machines or any other electronic device. The costs have to be recovered somehow. We know what a computer costs. We could imagine what this equipment would cost.
This bill really is a proxy for all the frustrations felt by consumers. Consumers need protection, not because they are incapable of working this out for themselves, but because they are busy people. It is not that they are lazy; they have families and jobs and they assume things.
Every now and then the cable company, the telephone company, a bank, almost anyone will do something and it is very subtle. We do not think it is a great deal even if we see something, although there is an additional five cents or three cents charged on an additional withdrawal in this account.
It is not enough for one individual to get excited about, but when that additional increase is spread over millions and millions of transactions, then we are talking about a significant amount of money taken out of the consumers' pockets on the basis of marketing strategies.
Who came up with the concept of negative option billing? Was it consumers? Did they say that business should do this because it is going to help them? Of course not. Negative option billing or marketing is a concept of business. It is a concept of consumer transactions within which the consumer perhaps might not win, but they surely can lose in certain circumstances.
If we go back to the credit card analogy, everyone knows that we get a period of 20 days or so between when the bill is received and when it is due. There is a grace period between when the money was spent or the purchase was made and when the cash has to be disbursed. In a perfect world, if we took that cash we would have otherwise used to pay for the purchase and put it in a bank account, and always left in the bank account all the moneys that we charged, at the end of a certain period, if it was an interest bearing account, we would accumulate a fair bit of money. We could accumulate a fair bit of money over a period of several years and still meet all of our obligations with regard to the banks.
Why do people not do that? The reason is quite simple. It takes time. We have to keep track of things. If we miss just once, all the work done over a couple of weeks could be gone by missing one transaction or one day. People are not in the business of trying to make nickels and dimes on odd amounts.
I liked this bill conceptually when we went through the first round in the last parliament. Now we are into an amendment to the Competition Act. Quite frankly, negative option billing or marketing has been described as a deceptive marketing practice. That is a harsh description or characterization, but it is accurate and I would like to make that clear. The reason it is deceptive is because if we do not do something, then something is going to happen to us. What if I am busy or away? What if I do not quite understand or have misread something? What if I am an elderly person and cannot read very well any more? What if I am just so tired that I cannot do it? What if someone misses because they just happen to be a human being? Chances are they will lose.
This is a high risk area for those who are maybe less able or less capable than some to protect their own interests. That is why, generally, all consumers should say that in principle we do have to protect the consumer population because within our group there are some who really are vulnerable. The stories we hear about abuse of the elderly, as a simple example, is certainly one reason alone that we just cannot be soft on high pressure, scientifically proven, financially viable marketing strategies that have been very successful. With the velocity of transactions that are taking place through Internet banking, et cetera, things are happening very quickly, Madam Speaker, so please do not blink, as you might miss part of my speech.
I wanted to make the point that the velocity of information is changing. The options are there. There are so many things that we can do. Quite frankly, we are in transition as a society.
People have to have a comfort level that they are going to be protected, especially when others want to change the nature of the environment in which they are going to do their consumer transactions.
I want to congratulate the hon. member for Sarnia—Lambton. He has been a champion for the consumer in this place. I believe that all hon. members respect him for his hard work. I hear that he has again reached report stage of a very important bill, and I know he is very much looking forward to having this accepted by the House so that he can go back to entertain his friends, the senators.