Canadian Contractor

John Bleasby   

The dreaded letter from Consumer Protection (Part 2)

Canadian Contractor

Customer disputes should not be ‘a cost of doing business’. Use Consumer Protection legislation to protect yourself

Let’s go back to the beginning, long before that ‘Dreaded Letter from Consumer Protection’ was delivered to your door.

What could have done to prevent that customer complaint from getting out of hand?

Provincial consumer agencies aren’t out to get you, the contractor. As Consumer Protection Ontario spokesman Stephen Puddister explains “Our main line of business is education; informing the consumer on how to protect themselves within their rights and responsibilities under our [Consumer] Act…and to encourage consumers and contractors to negotiate all the items that should be covered in the contract.  These should include payments, deposits, written estimates, a fair and accurate description of the services expected, how to deal with discrepancies, dispute mechanisms, cost overruns, added extras. The goal for all is a more positive experience.” In other words: Dispute Avoidance versus Dispute Resolution.

Mind you, some provincial consumer protection offices can be very aggressive in response to a pattern of bad behavior. Service Alberta set up a ‘sting operation’ in December 2013, wherein attempts were made to lure 24 contractors in Calgary and Edmonton into violating various provincial regualtions. Seven were charged. However, this type of aggressiveness is unusual and not a tactic that Ontario would likely employ, according to Mr. Puddister.


Use Consumer Protection as a tool to protect yourself.
The key to a happy ending is the contract. ‘Get it in writing’ is a common theme of most checklists and self-help pages on provincial government consumer websites; everything that needs to understood and covered in advance between the client and the contractor is outlined.  In fact, as Mr. Puddister suggests, the websites “can be tweaked to work for the contractor….Use those checklists and recommendation to formulate your own contracts and business strategies.” It makes good sense.

Check for rules that are specific to your province
Legislation governing licencing, deposit, holdbacks and contracts may vary from province to province, and are likely based on the past experiences within their jurisdictions and on related labour and contract Acts. For example, Alberta contractors must be licensed if accepting deposits and pre-paid work over $200. Manitoba requires contracts for most renovation work that must include price, payment terms and timelines. Ontario legislation permits consumers to withhold up to 10% of the contracted price for up to 45 days after work is completed. This is a somewhat controversial consumer right designed to protect consumers against incomplete or inferior work, or non-payments to sub-trades by the contractor. However, pre-recognition of its potential for abuse by customers can in fact help a contractor mold a protective agreement.

The 10% solution
Many provincial consumer protection services recommend restricting pre-paid deposits to 10%, echoing remarks attributed to controversial TV handyman Mike Holmes. This 10% solution can mislead consumers into believing that asking for a larger deposit is a sign of an unscrupulous contractor. Stephen Puddister responds by saying: “Each contract is unique, and it’s up to the consumer to work with their tradespeople. The 10% recommendation is a guideline, a rule of thumb, and only one of things you have to hammer out at the beginning when estimates and contracts are being developed.”

No matter what, the wished-for Happy Ending will be a result of the Complete Beginning. No ‘Knock on the Door’ for you!

Did you miss reading Part 1 of this series?


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1 Comment » for The dreaded letter from Consumer Protection (Part 2)
  1. All the above articles are very informative. We bona fide contractors have a duty and an interest in exposing crooked individuals who pass as contractors and are out to fraudulently deceive vulnerable and/or gullible homeowners. Thank you ” Canadian Contractor ! “

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