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Chargeback under Ontario Statute

This is a guide to exercise your rights under the Consumer Protection Act of Ontario, and the General Regulation made pursuant to the Act.

If you did not receive services you purchased under a future performance agreement, then you may be entitled to a refund under provincial law. (It is not the same as going through your card issuer or bank’s internal chargeback process; see Statutory vs. "Internal" Chargeback.)

There are a number of steps involved in this process, which you proceed through as necessary.

  1. Provide notice of cancellation of the future performance contract. Then wait 15 days.
  2. Provide a written notice to your card issuing bank that you dispute the charge within 60 days of completing Step 1. Then wait 30 days for acknowledgement, and up until you receive two statements (from date of notice to card issuer) for refund.
  3. Provide a written notice to your card issuing bank that you are clawing back the money.

Further details on timelines are included within the detailed guide for each step.

Be aware that the final step in exercising your rights with uncooperative card issuers is to stop using the credit card. Therefore, you may wish to have an alternative credit card available to you at the earliest opportunity.

Time Limit

Note the very specific 60 day time limit in Step 2.

In Ontario, you are eligible to proceed if you meet the following criteria:

  • The agreement is a consumer agreement (s. 1).
  • You or the supplier were located in Ontario at the time of the transaction (s. 2(1)).
  • You paid more than $50 (Act, s. 21(1) and Regulation, s. 23.1).
  • It has been more than 30 days since your scheduled departure date (s. 26(1)(b)).
  • You paid with a credit card (s. 99(1)).

Exceptions

  • If you paid with a debit card, you can still complete Step 1 of this guide to cancel your contract and ask for a refund, but you cannot complete Step 2 or 3 as they are related to credit cards only. You may have other remedies available under Ontario law.

In this step, you give formal notice to the supplier that the contract is cancelled, and request a refund.

  • When: If your flight has been cancelled and it has been 30 days since the originally scheduled date of departure, you may proceed with this step.
  • To Whom: The company that charged your card and whose name appears on your statement is the supplier.
  • How: Subsection 92(3) of the Act allows giving notice orally or in writing. The notice in writing is deemed to have been given when sent.
  • Where: If you want to send a letter, use the address provided on the contract or their registered business address (commonly found on their website).
  • Proof: Ensure you have proof of delivery. If providing notice via oral means, record your call.

Letter Template for Ontario (Step 1)

In this step, you exercise your rights under the Act to request a statutory chargeback with your credit card issuer to recover illegitimate charges.

  • When: If you do not receive a refund within 15 days of sending your notice from Step 1, you may proceed to this step.
  • Time Limit: This notice must be sent withing 60 days of the 15 period in Step 1 ending. (See example below.)
  • How: Send a letter to your credit card issuer.
  • Where: Use the address provided on your credit card bill.
  • Proof: It may be helpful to send this letter by registered mail so that you have proof of sending and delivery.

Letter Template for Ontario (Step 2)

Time Limit

Note the very specific 60 day time limit here, prescribed in s. 85(1) of the Regulation.

  • The contract is deemed cancelled on the day of sending the notice in Step 1.
  • The merchant has 15 days from the date following you sending the cancellation to provide a refund.
  • If they do not, you then have 60 days from the date following the end of this period to initiate Step 2.
  • Example timeline:
    • November 1 - Send cancellation letter
    • November 16 - Deadline for refund (60 days start now)
    • November 17 - Date you can initiate Step 2
    • January 15 - Date by which you must have initiated Step 2
  • You can use the Date Calculator to help you with this.

In this step, you claw back the disputed amount if the card issuer fails to comply with the obligation to reverse the illegitimate charge within the timeframe prescribed by law.

  • When: If the card issuer did not reverse the the illegitimate charge by the end of the second billing period sent to you after receiving the notice you sent them in Step 2 (Regulation, s. 85(4)).
    • A billing cycle is the time between bills.
    • In most cases, with monthly billing, two complete billing cycles would be the shortest duration.
    • To ensure you meet the definition of 2 complete billing cycles, you may want to wait for your current billing cycle to end, and then wait for two further billing cycles to complete before sending your next letter.
  • What: You take two distinct actions simultaneously.
    1. Claw back the disputed amount. In practical terms, this means paying the balance of the card minus the disputed amount, and ceasing use of the card.
    2. Inform your card issuer in writing that you will not be paying the disputed amount, and request that the card issuer take you to court.
  • How: Send a letter to your credit card issuer by registered mail. Registered mail is a requirement under paragraph 7(9)(c) of the Credit Business Practices Regulations, and also provides proof of sending and delivery.
  • Where: Use the address provided on your credit card bill.

Letter Template for Ontario (Step 3)

Rights and protections provided by the Consumer Protection Act cannot be waived or contracted out. Section 7(1) of the Act renders such a waiver void.

This means that regardless of what you have agreed to with any airline, tour operator, travel agency, or your credit card issuer, your rights are absolute.

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