Calgary

Payday loan ripoffs, renovation scams targeted as Alberta tallies $1M in restitution to protect consumers

A home renovator sent to prison for repeatedly scamming customers, the first-ever conviction of a payday lender for charging an illegal interest rate and door-to-door furnace sellers banned for using misleading contracts: these are three examples highlighted by the Alberta government as it laid out the actions it took to protect consumers in the past year.

Stephanie McLean says tough action taken against companies that 'flat-out lied and scammed their customers'

Service Alberta Minister Stephanie McLean says the province ordered nearly $1 million in restitution in fiscal 2016-2017 as a result of provincial investigations into breaches of consumer protection laws by businesses, including payday lenders and home renovators. (CBC/Associated Press)

A home renovator sent to prison for repeatedly scamming customers, the first-ever conviction of a payday lender for charging an illegal interest rate, and door-to-door furnace sellers banned for using misleading contracts — these are three examples highlighted by the Alberta government as it laid out the actions it took to protect consumers in the past year.

In the 2016-2017 fiscal year, Alberta Courts ordered more than $957,000 in restitution as a result of provincial investigations into breaches of consumer protection and tenancy laws, Service Alberta Minister Stephanie McLean said in Calgary on Thursday.

"We have banned companies from doing business in Alberta, we have laid criminal charges, we have gone to court against those who have misled customers, failed to cancel contracts, failed to honour warranties, or flat-out lied and scammed their customers," she said.

Service Alberta's consumer investigations unit concluded 618 files last year and doled out $272,445 in fines to individuals and businesses for contraventions such as misleading consumers, operating without licences or failing to refund consumers.

McLean highlighted the case of Tam Dang, whose family was saddled with faulty furnace equipment and a lien on their home after an HVAC company refused to let them cancel a contract for an add-on air filtration system.

After assistance from Service Alberta, the family received their money back, the contract was cancelled and the lien was removed, McLean said.

The company was fined $3,000 and its licence was cancelled by Service Alberta after officials concluded the company's sales practices and contract terms contravened the Fair Trading Act.

"Without the help of the consumer investigations unit, we would be making payments for 10 years on equipment we don't even use. Make sure you come forward with concerns and file a consumer complaint. This process can protect your rights against companies that target vulnerable people, especially seniors," Dang said.

Enforcement actions highlighted by province

The province says some of the other notable enforcement actions initiated by Service Alberta included:

  • A home-renovation contractor was given a nine-month prison sentence and ordered to pay $76,875 in restitution to former customers after repeatedly trying to scam clients by not completing promised work.
  • The first-ever conviction was obtained under the Emergency Management Act for hiking a tenant's rent during the rent freeze while wildfires raged in Fort McMurray. A landlord was fined $2,000 with a $300 victim surcharge or 19-day jail sentence.
  • Another landlord in Fort McMurray was fined $7,000 by the provincial court — the largest-ever fine against a landlord — for inappropriate handling of tenants' security deposits.
  • The first-ever charge and conviction occurred under the Fair Trading Act for payday lending. A lender was fined $1,150 in provincial court for charging an illegal interest rate.

The province listed steps consumers can take to protect themselves from unscrupulous contractors and businesses, including:

  • Check that the business has a licence at ServiceAlberta.
  • Shop around and get written estimates from multiple businesses before signing a deal.
  • Do some research by checking online reviews of contractors and service providers.
  • Be sure to understand the total prices and terms of any contracts.
  • Never accept verbal agreements — always get a written contract.
  • Be cautious about special offers of prizes or contests.
  • Call Service Alberta's consumer protection line toll free at 1-877-427-4088 to report concerns.

Court ordered restitution to consumers in Alberta have ranged from $712,000 in fiscal 2012-2013 to $560,000 the following year, $991,523 the year after that and $1,106,717 in fiscal 2015-2016.

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