Business guide to consumer protection

This guide provides businesses with general information on the Consumer Protection Act. It helps businesses comply with the law and avoid consumer complaints.

This information is for general use only. It is not intended as legal advice.

About this guide

The goal of the ministry is to help consumers help themselves in today’s marketplace, and to help businesses comply with Ontario’s consumer protection laws.

Consumer Protection Ontario is an awareness program from the ministry, and other public organizations, known as administrative authorities, that promote consumer rights and public safety.

The ministry and these administrative authorities enforce a number of Ontario consumer protection and public safety laws, investigate alleged violations and handle complaints.

Operating a business in Ontario involves responsibilities. Among the most important of these is to comply with the Consumer Protection Act.

This guide provides a brief summary of some of the things a business needs to do to comply with consumer protection law in Ontario.

Following the guidelines set out here will also help you create a stronger foundation for good customer relationships. This is an important part of success in business.

The information provided in this guide is for general use only. It is not intended as legal advice, or to be a complete statement of the law governing consumer protection, which may change from time to time.

Your customers may contact us for specific consumer protection-related questions.  As well, it is recommended you contact your legal counsel for any advice you require on consumer-protection law.

The Consumer Protection Act

In Ontario, the Consumer Protection Act (also referred to as the “act” in this guide) and its regulations are the main pieces of legislation that set out the rights of consumers. They cover the most common forms of transactions your customers will make in this province.

Let’s begin with some definitions that can be found in the act:


A person who is in the business of selling, leasing or trading in goods or services, or their agents. A supplier is called a “business” in this guide.


An individual acting for personal, family or household purposes. This term does not include a person who is acting for business purposes.

Consumer agreement

An agreement between a supplier (referred to as “business” in the guide) and a consumer in which the supplier agrees to supply goods or services for payment.

Consumer transaction

An act or instance of conducting business or other dealings with a consumer, including a consumer agreement.


Any type of personal property, except real estate.


Anything other than goods, including services, rights, entitlements or benefits.

Key consumer protection concepts

All businesses in Ontario should be aware of basic concepts in consumer protection if they are to serve consumers successfully. Causing consumer harm may result in compliance action by the ministry. Here are some important concepts:


The products or services you sell, and how and where you do business, will determine what information you must provide to consumers, and more importantly, the rights that consumers have.

For example, a lawn-care services business, whose customers sign contracts at the door, should have a different kind of contract than a lawn-care company that gets its customers to sign up at the company’s place of business. A consumer who enters into an agreement at their door for lawn care services, gets at least a 10-day cooling off period in which to cancel the agreement; a person who enters into an agreement at the suppliers’ place of business does not.


Does your business include estimates on work to be performed in its contracts with consumers?

If so, remember the law says you can only bill a customer 10% more than the price you estimate, unless the customer agrees in writing to the additional charges. You should make every effort to ensure your estimate is as accurate as possible and, if the project changes in a major way, make sure you provide the customer with a revised written estimate, and you both sign off on the new price.

Refunds and exchanges

Generally speaking, having a policy regarding refunds and exchanges makes good business sense.  The Ontario marketplace is full of companies that offer refunds and exchanges, and consumers have come to expect these options. If you choose to offer refunds and/or exchanges, setting out your policies in writing and informing your customers about the policies at the time of sale will help avoid misunderstandings and disappointment. 

There is no legal requirement to provide for a refund or an exchange, but, if you have a publicly-stated refund and exchange policy, you are expected to follow it. If you don’t, you may be considered to have engaged in an “unfair business practice” under the act. 

Important! There are very specific times when refunds are required by law. These apply in situations where customers did not receive their goods or services on time, or did not receive the product that they wanted.

Unfair practices

It is never a good idea to mislead customers. The old saying of “under-promise and over-deliver,” is usually a good policy.

Customers expect honesty, even if it means disappointment. It is also against the law to lie about the goods and services a business provides. The Consumer Protection Act states:

“It is an unfair practice for a person to make a false, misleading, or deceptive representation.”

Transactions that involve misrepresentations undermine the foundation of trust you are building with your customers and can hurt your business. As well, there are serious legal implications for engaging in an unfair practice.  More broadly, if unfair practices became the norm in the consumer marketplace, it would seriously undermine confidence in Ontario’s economy. Consumers should have trust in the firms with which they do business.

To help you to understand what might be a false or deceptive representation, consider the following examples:

  • an appliance store salesperson tells a consumer that the model and style of a refrigerator currently on sale is the most eco-friendly, top consumer-rated, newest model the manufacturer makes – but the salesperson knows that information is out-dated and no longer true
  • an owner of a spa that provides massage services tells clients that staff members are all registered massage therapists, when they do not possess the designation and have not been appropriately trained
  • a store sells electronics advertised as new when they have actually been refurbished.
  • a salesperson at a repair shop for sewing machines tells a customer that they need to replace a part, when that part does not need to be replaced 

Consumers in Ontario have 1 year to withdraw from an agreement if it resulted from an unfair business practice by a supplier.

Unconscionable representations

There is a secondary category of unfair practices, known as unconscionable representations. Examples of these include:

  • asking a consumer who is vulnerable, because of age or language barriers, to sign a contract for goods or services, when the customer is not in a position to protect their own interests
  • selling a water purification system for a home for thousands of dollars, when a consumer could purchase the same system for hundreds of dollars
  • pressuring a consumer to enter an agreement

It is also against the law to renegotiate an agreement when the business has the consumer’s goods in its possession. For example, if a moving company is transporting a consumer’s goods, it is illegal for the movers to refuse to deliver the goods and try to negotiate a higher fee.

These examples are important for every business to understand, because consumers have the right to withdraw from – or what the act calls "rescind" – agreements if they entered into the contract as a result of an unfair business practice. It is also an offence under the act to commit an unfair business practice. If the consumer takes the matter to court, and is successful, the courts may award damages, including punitive damages.  

If a consumer withdraws from a contract with your business, your business must refund his or her money within 15 calendar days. You will also have lost the consumer’s trust and confidence. Businesses often rely on “word of mouth” to attract and retain customers. One unhappy customer can be costly.

Gift cards, gift certificates and vouchers

Gift cards, gift certificates, or vouchers are very popular offerings to customers.

But there are a few things you should consider if you sell these products to consumers, since Ontario has legislation that protects consumers that you may not be aware of.

For the most part, cards, gift certificates and vouchers:

  • cannot have an expiry date
  • are not subject to tax when initially sold
  • cannot have special conditions or terms limiting their use

General information about contracts

The verbal or written agreements that govern business transactions or dealings with customers are known as “contracts.”

We recommend that businesses use written contracts. They are the best way to ensure a clear understanding between parties. Verbal contracts are not recommended because, in the event of a dispute, it is hard to prove exactly what the parties have agreed to.

In addition, the Consumer Protection Act requires that most types of agreements worth more than $50 must be in writing. Other types of agreements, such as a timeshare agreement, must also be in writing, regardless of the amount.

To comply with the law, business owners have to include specific kinds of information in their written contracts. Getting the right information into a contract is important because failing to include all the required information may result in misunderstandings, consumer complaints, investigation of your business practices and, ultimately, enforcement action against your business. In addition, in some circumstances, a consumer has the right to cancel an agreement entirely, without any compensation to the business. 

Clearly written contracts will help your customers better understand what they are buying and avoid potential confusion, disappointment and litigation. While consumers can dispute verbal agreements through the courts, a business risks losing its case when it does not comply with the requirements of the act. A business may also face additional compliance action from the ministry. In addition, court actions, whether successful or not, are costly and time-consuming. Your reputation as a business may also suffer.

Doing business in the underground economy

It may seem like a money-saving idea to deal with customers “under the table,” with cash payments, no contracts and without charging taxes. Customers may even encourage a business to operate this way. But this is not smart business practice. It leaves both business and consumer exposed and unprotected. Beyond the consumer protection risks, undocumented transactions are often a sign of tax and/or remittance avoidance or evasion. A consumer dispute could lead to attention from the tax authorities, at the provincial and federal level.

The underground economy is an issue that the Ontario government takes seriously, and actively discourages businesses from participating in it.

Types of contracts

Various types of contracts are established in the Consumer Protection Act. We recommend that you familiarize yourself with these contracts by reviewing the act.

Did you know?

The Consumer Protection Act requires that any uncertainty in a consumer agreement must be interpreted in favour of the consumer.

It’s important to make sure that your contracts are clear – and any information that the act requires be disclosed be done in a clear, understandable and prominent manner.

Certain kinds of contract could apply to your business, based on your offerings or the type of business you are running.

The following are the most common forms of contracts:

Direct agreements

If you sell goods or services on the road, and are going into your customers’ homes to sign contracts, you may need to use a direct agreement. This is a consumer agreement that is negotiated or concluded in person, at a place other than the supplier’s place of business.

The most common place where goods and services such as water heaters, home renovations, lawn services, etc. are sold is at a consumer’s residence.

Motor vehicle repair agreements

If you own a garage that fixes cars or other vehicles for use on Ontario roads, you will need to do business using a motor vehicle repair agreement and follow certain procedures.

Personal development services agreements

If you provide services such as fitness instruction or personal training, dance instruction or sports instruction, you may need to use a personal development services agreement.

Other areas covered by personal development services agreements include:

  • health, fitness, weight loss and nutritional advice, or matters of a similar nature
  • modelling and talent, including photo shoots relating to modelling and talent, or matters of a similar nature
  • martial arts, sports, dance or similar activities

Note: There are certain exceptions to the act that apply to this type of agreement, based on who or how the personal development services are provided: the rules don’t apply if payment in advance is not required. The most common type of personal development services agreements is gym memberships. 

Our consumer rights video recommends that consumer learn about their options before signing a fitness membership.

Internet agreements

If you sell goods or services over the internet, you may need to use an internet agreement. This is defined as a consumer agreement formed by text-based internet communications. These include all transactions on the internet, as long as either the business or the consumer is based in Ontario.

Future performance agreements

If your customer usually has to wait to get their goods or services, with a delivery date promised in the future, you may need to do business using a future performance agreement.

This is a consumer agreement for goods or services that are not otherwise specifically covered by another type of agreement. Where this is the case, the agreement involves providing the good or service, or payment, in the future or on an ongoing basis, such as, maintenance or cleaning or internet services.

Remote agreements

If you offer goods and services over the phone, you may need to do business using a remote agreement. This is a consumer agreement entered into when the consumer and supplier are not present together, but does not include an internet agreement.

These kinds of agreements are generally entered into by phone. The consumer must be made aware of the required information before they enter an agreement with the business. Services sold over the phone might include duct cleaning and cable television contracts.

As these contracts are entered into when the business and consumer are not in the same place, there is a requirement that the consumer receive a written copy of the contract either within 30 days of being billed for the services or goods, or 60 days after the consumer enters into the agreement.

Special cases

Some transactions by their very nature, or if conducted by various occupations, are not covered by the Consumer Protection Act. Please see the list below, which outlines some of these more frequent exceptions.

  • if you are part of a recognized professional group that regulates your services. This would include doctors, veterinarians, architects, accountants or pharmacists
  • accommodations, such a hotel, are exempt from some parts of the act
  • if you are selling your goods/services through an auction.
  • if the goods you are selling are perishable goods and if the food is delivered to the consumer within 24 hours that it is ordered – this exception covers activities like ordering a pizza for delivery or restaurant takeout order

Note: For most of these special cases – such as accommodation and lotteries – businesses may need a specific license to do business.

Contact us if you are not sure which category best applies to your business or require additional clarification.

Learn more about government services and resources for businesses.

Consumer complaints

We regularly get complaints about businesses from consumers. If a complaint meets certain criteria, the ministry will want to find out whether a contravention of consumer protection law has occurred.

A key question is: “Have the consumer’s rights been violated?” The ministry may contact the business on behalf of the consumer and try to mediate a solution, if that is what the ministry determines is appropriate under the circumstances.

When a business does not respond to the ministry, address a complaint that has been verified by the ministry, or attempt to resolve the matter after the ministry has attempted to facilitate a solution, the ministry is required to post the details of that matter and, the business’ name, on the Consumer Beware List.  

The Consumer Beware List lets people search for businesses that have violated Ontario’s consumer protection statutes, or have failed to respond to our requests when pursuing a complaint.

Finally, the ministry may initiate an inspection or an investigation. Inspectors from the Ministry of Government and Consumer Services have the right to enter any place of business in Ontario and to examine the documentation relevant to a customer dispute. They may also require the assistance of the person being inspected, and, where appropriate, issue orders to require compliance with the law. Investigations may lead to charges and prosecution.

If found guilty under the Consumer Protection Act, a business may be fined up to $50,000 (for an individual), or sentenced to a term of imprisonment of not more than 2 years less a day; for corporations the maximum fines is $250,000.

When a charge is laid, or an order is issued against a business, the business name will appear on the Consumer Beware List and remain there for 21 to 27 months. Information relating to a charge will be removed if the business has been found not guilty of that charge.

Complaint handling process at a glance

The ministry:

  1. receives a consumer complaint
  2. determines if the act has been violated. If it hasn’t, we provide education to the consumer and end the complaint process. If the act has been violated, the complaint process moves to step 3
  3. contacts or educates the business and the consumer to facilitate a solution to the issue
  4. ends the complaint process if the complaint is resolved in accordance with the act. If not, we enforce the act. Options include:

    • possible compliance action against the business
    • investigation
    • Director’s Order issued
    • charges
    • prosecution
    • posting to Consumer Beware List

Did you know?

In 2014, the ministry laid 481 charges under the Consumer Protection Act and other acts enforced by the ministry.

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