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Big win in Peoples Trust class action

May 14, 2019

Court Awards $16.8 million to Ontario Consumers

On May 13, 2019, the Ontario Superior Court granted judgment in a ground-breaking class action brought on behalf of Ontario consumers of “gift cards” who were charged illegal fees.

Toronto law firms Sotos LLP and Goldblatt Partners LLP jointly represent Representative Plaintiff, Joyce Bernstein, against Peoples Trust Company (“Peoples Trust”).  Bernstein brought the case on behalf of consumers who bought or were given prepaid “credit” cards issued by Peoples Trust.

These cards, including the popular Vanilla Visa and Vanilla MasterCard, are often sold alongside other gift cards and can be used to purchase goods and services from merchant who accept Visa and MasterCard. The class action alleged that these prepaid cards were “gift cards,” under the Consumer Protection Act, and were therefore subject to rules that prohibited Peoples Trust from seizing “expired” funds or charging various fees.

Superior Court Justice Paul Perell agreed. He found that, during the relevant period, Peoples Trust had improperly seized $15,330,000 in illegal fees and “expired” funds.

The judge 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…”

However, Justice Perell declined to award any damages in respect of 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.  He 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.

Read the decision here.

For more information, contact Nadine Blum or Charles Sinclair.

Lawyers

Nadine Blum, Charles Sinclair

Practice Areas

Civil Litigation, Class Action Litigation, Consumer Protection