Bernstein v. Peoples Trust Company
Consumer Class Action
What the class action is about
On May 26 2014, a proposed class action was commenced against Peoples Trust Company and Peoples Card Services LLP on behalf of a class of consumers in Ontario. The lawsuit alleges that the defendants breached the Ontario Consumer Protection Act by extracting unauthorized and illegal fees from prepaid credit cards they sold.
The lead plaintiff is Joyce Bernstein, who in September, 2010 obtained a prepaid visa card branded with the name “Vanilla Prepaid Visa”. The Vanilla Prepaid Visa card, which the defendants issued, stated on it that it was “valid thru to 04/14”. In September, 2013, and despite never having used her card, Ms. Bernstein learned that all the amounts on her card had been seized by Peoples Trust.
Update, September 29, 2020: The settlement has been approved!
The Settlement Approval Hearing was heard via video conference on September 25, 2020. The Honourable Justice Perell has approved the settlement, distribution protocol and class counsel fees in this matter. You can read the decision here.
For more information about this this class action and the settlement, please visit prepaidclassaction.ca
Update, September 23, 2020: Plaintiff files her factums
The Plaintiff has now filed her legal arguments on the issues that will be determined in the settlement approval hearing this Friday. You can read her factum concerning the settlement approval here, her factum on the distribution of the settlement funds to class members here, and her factum on counsel fees here.
Update, September 9, 2020: Plaintiff files her motion material
The Plaintiff has filed her material for the settlement approval hearing scheduled for September 25, 2020. You can read the affidavits here.
Update, July 24, 2020: Parties reach a tentative settlement!
The parties have entered into a settlement agreement dated July 15, 2020. A copy of the agreement can be found here.
The settlement, which is subject to Court approval, provides for an all-inclusive payment of $17,000,000. It represents a compromise on the part of both sides. The parties have agreed that their respective appeals will be dismissed, with the exception that they have agreed that the Court of Appeal may overturn the finding on punitive damages. If approved, the settlement will provide further benefit to the Class by allowing for claims by both SLP and GPR cardholders and by removing the delay of the appeal and any leave application that would follow.
A motion to approve the plan for giving notice to the Class of the settlement approval hearing will be heard in writing during the week of July 27, 2020. A copy of the motion record for that hearing can be found here.
You can read the Distribution Protocol here. If approved by the Court, it will govern the process of distributing the funds obtained in the settlement to the class members.
The settlement approval hearing will be held by video conference on September 25, 2020. Further information and materials will be posted as they become available.
Update: Appeal rescheduled
The date for the hearing of the appeal in this case has been rescheduled for June 9, 2020.
Update: Court of Appeal to determine the case
The defendants have appealed the Ontario Superior Court’s decision that the Peoples Trust prepaid cards were “gift cards” under the Consumer Protection Act that could not be seized. The plaintiff has cross-appealed on the issue of whether the other types of cards in issue should also have been found to be gift cards under the Act.
The Ontario Court of Appeal has scheduled the appeal and cross-appeal to be heard on February 5, 2020.
May 13, 2019 – Summary judgment win!
On May 13, 2019, the Ontario Superior Court granted judgment. It agreed with the plaintiff that Peoples Trust prepaid cards were “gift cards” under the Consumer Protection Act. Therefore the cards were subject to rules that prohibited Peoples Trust from seizing “expired” funds or charging various fees.
The Court held that Peoples Trust had improperly seized $15,330,000 in illegal fees and “expired” funds. It also ordered Peoples Trust to pay $1.5 million in punitive damages, finding that its conduct was “an intentional violation of the legislation and conduct that displays ignorance, carelessness, or serious negligence…”
Unfortunately, the Court did not award damages in respect to the other types of cards at issue in this class action – the General Purpose Reloadable cards, which are often sold at payday loan stores like Money Mart. The Court concluded that these prepaid cards were “financial products” and not “gift cards” subject to the Consumer Protection Act.
The parties have 30 days to appeal the decision.
If the case is not appealed, the next step will be for the Court to determine the appropriate method or procedure for distributing the funds to consumers who purchased Peoples Trust prepaid cards during the relevant period.
Summary judgement trial rescheduled for April 2019
The summary judgement trial before the Ontario Superior Court of Justice, originally scheduled for September 2018, has been rescheduled for the week of April 1, 2019.
June 5, 2017: Distribution of the Notice of Certification
The Superior Court of Justice has approved the Notice of Certification and has issued an order concerning its distribution. The Order and Notice of Certification explain to potential class members what they must to in order to remain in or opt out of the class proceeding.
March 30, 2017: Court issues Certification Order
The Superior Court of Justice has released the Certification Order. The Certification Order defines the class as follows:
All consumers within the meaning of the Consumer Protection Act, 2002, SO 2002, c. 30, Sch A (“CPA”) in Ontario, who were Cardholders, between November 29, 2011 and April 30, 2014, of Prepaid Cards, sold and/or issued by Peoples Trust Company.
January 31, 2017: The class action has been certified
The Ontario Superior Court of Justice has certified the class action against Peoples Trust Company and Peoples Card Services LLP. This means that the lawsuit can proceed as a class action.
You can read the Court’s decision here.
The specific definition of the class will be clarified in the next few days.
The next step is the discovery process, in which the parties will exchange all relevant documents and other evidence relating to the issues in the class action. The case will then proceed to a hearing on the merits.