Advertising of cost of borrowing
29. (1) Subject to the regulations, no lender shall represent, either orally or in print, or by radio or television broadcast, the lender’s charge for credit or cause such charge to be so represented unless the representation includes the full cost of borrowing and is expressed in the manner required by section 24 or 25. R.S.O. 1990, c. C.31, s. 29 (1). Advertising of other terms of credit (2) Subject to the regulations, where a lender represents or causes to be represented in a printing, broadcast or other publication any terms of the credit agreement other than that referred to in subsection (1), the lender shall also include or cause to be included all other relevant terms of the credit transaction, including, (a) the sum to be actually received in cash by the borrower or the actual cash price of the goods; (b) the amount of the down payment; (c) the amount of each instalment; and (d) the number of instalments required to repay the total indebtedness, including the cost of borrowing. R.S.O. 1990, c. C.31, s. 29 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, section 29 is repealed by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 and the following substituted: Deferral of payments 29. (1) If the lender under a credit agreement invites the borrower to defer making a payment that would otherwise be due under the agreement, the invitation must clearly disclose whether or not interest will accrue on the unpaid amount during the period of the deferral. Waiver of interest (2) If the invitation does not disclose whether or not interest will accrue on the unpaid amount during the period of the deferral, the lender shall be deemed to have waived the interest that would otherwise accrue during the period. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Default charges 29.1 A lender is not entitled to impose on a borrower under a credit agreement default charges other than, (a) reasonable charges in respect of legal costs that the lender incurs in collecting or attempting to collect a required payment by the borrower under the agreement; (b) reasonable charges in respect of costs, including legal costs, that the lender incurs in realizing a security interest or protecting the subject matter of a security interest after default under the agreement; or (c) reasonable charges reflecting the costs that the lender incurs because a required payment by the borrower under the agreement has been dishonoured. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Prepayment 29.2 (1) A borrower is entitled to pay the full balance of outstanding principal under a credit agreement at any time without any prepayment charge or penalty. Credit to borrower (2) If a borrower prepays the full balance of outstanding principal under a credit agreement for fixed credit, the lender shall refund to the borrower or credit the borrower with the amount determined in accordance with the regulations that is a portion of the charges, other than charges on account of interest, that the borrower was required to pay under the agreement or that were added to the principal under the agreement. Partial prepayment (3) A borrower is entitled to prepay a portion of the balance of outstanding principal under a credit agreement for fixed credit on any scheduled date of the borrower’s required payments under the agreement or once in any month without any prepayment charge or penalty. No credit to borrower (4) A borrower who makes a payment under subsection (3) is not entitled to a credit for the charges, other than charges on account of interest, that the borrower was required to pay under the agreement or that were added to the principal under the agreement. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Disclosure Advertising 29.3 (1) No lender shall make representations or cause representations to be made with respect to a credit agreement, whether orally, in writing or in any other form, unless the representations include the information prescribed by the regulations. Credit cards (2) No credit card issuer shall make information about a credit card available, whether in writing, orally or in any other form, unless it contains the information about the credit card that is prescribed by the regulations. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Credit broker’s statement 29.4 If a credit broker takes an application from a borrower for a credit agreement and sends it to a lender who, in the course of carrying on a business, enters into the credit agreement with the borrower, the broker shall promptly deliver to the borrower a statement that, (a) states the amount of the brokerage fee; (b) indicates the effect that the brokerage fee will have on the APR under the agreement and the total amount, calculated in accordance with the regulations, of all payments that the borrower is required to make under the agreement, if applicable; and (c) contains all the other information that the lender is required to disclose to the borrower in the initial disclosure statement. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Initial disclosure statement 29.5 (1) Every lender shall deliver an initial disclosure statement for a credit agreement to the borrower before the earlier of, (a) the time that the borrower enters into the agreement; and (b) the time that the borrower makes any payment in connection with the agreement. Form of statement (2) The initial disclosure statement shall, (a) be in writing or, if the borrower consents, in a form that allows the borrower to retain it; and (b) express the information contained in it clearly, concisely and prominently. Contents of statement, fixed credit (3) The initial disclosure statement for a credit agreement for fixed credit shall state, (a) the total, calculated in accordance with the regulations, of the value that the borrower will receive under the agreement; (b) the total amount, calculated in accordance with the regulations, of all payments that the borrower is required to make under the agreement; (c) the term of the agreement and the amortization period if different from the term; (d) the annual interest rate under the agreement and the particulars about the interest payable under the agreement that are prescribed by the regulations; (e) the APR under the agreement if different from the annual interest rate; (f) the particulars about the amount and timing of all payments under the agreement that are prescribed by the regulations; and (g) all other information about the agreement that is prescribed by the regulations. Contents of statement, open credit (4) The initial disclosure statement for a credit agreement for open credit shall state, (a) the credit limit under the agreement; (b) the term of each period for which the lender is required to deliver a statement of account to the borrower under section 29.7; (c) the minimum payment required under the agreement for the period or the method of calculating it; (d) if the agreement is for a credit card and requires the borrower to pay the balance outstanding under the agreement in full on receiving each statement of account, (i) the fact that the borrower has that obligation, and (ii) the period after receiving a statement of account within which the borrower is required to pay the balance outstanding under the agreement in order to avoid being in default under the agreement; (e) the interest rate under the agreement if it is fixed or the manner in which interest is calculated under the agreement if there is no fixed interest rate; (f) the particulars about the interest payable under the agreement that are prescribed by the regulations; (g) the APR under the agreement except in the case of a credit agreement for a credit card; (h) if the agreement is for a credit card, the maximum liability of the borrower under the agreement in cases where the borrower has not authorized the use of the card; and (i) all other information about the agreement that is prescribed by the regulations. Brokerage fee (5) If a credit broker arranges a credit agreement for the lender, the initial disclosure statement shall, (a) state the amount of the brokerage fee that the borrower is required to pay if, (i) the lender does not enter into the agreement in the course of carrying on a business, or (ii) the lender enters into the agreement in the course of carrying on a business and the lender deducts the brokerage fee from advances payable under the agreement; and (b) where the amount of the brokerage fee is required to be stated under clause (a), account for the brokerage fee in the APR under the agreement and the amount described in clause (3) (b), if applicable. Adoption of other statement (6) If a credit broker has delivered a statement to the borrower under section 29.4, the lender may adopt it as the initial disclosure statement that the lender is required to deliver under this section. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Subsequent disclosure: fixed credit 29.6 (1) If the interest rate on a credit agreement for fixed credit is a floating rate, the lender shall, at least once every 12 months after entering into the agreement, deliver to the borrower a disclosure statement for the period covered by the statement stating, (a) the annual interest rate at the beginning and end of the period; (b) the balance of outstanding principal under the agreement at the beginning and end of the period; (c) if the agreement contains a schedule of required payments by the borrower, the amount and timing of all remaining payments based on the annual interest rate at the end of the period covered by the statement; and (d) all other information about the agreement that is prescribed by the regulations. Increase in interest rate (2) If the interest rate on a credit agreement for fixed credit is not a floating rate and the agreement allows the lender to change the interest rate, the lender shall, within 30 days after increasing the annual interest rate to a rate that is at least 1 per cent higher than the rate most recently disclosed to the borrower, deliver to the borrower a disclosure statement stating, (a) the new annual interest rate; (b) the date the new rate takes effect; (c) the way in which the amount or timing of any payment will be affected by the change in the interest rate; and (d) all other information about the agreement that is prescribed by the regulations. Insufficient scheduled payments (3) If the principal under a credit agreement for fixed credit increases as a result of default charges or the failure of the borrower to make payments under the agreement to the point that the amount of the borrower’s scheduled payments under the agreement is no longer sufficient to cover accrued interest under the agreement, the lender shall give the borrower notice in writing to that effect within 30 days. Amendments (4) If information disclosed in a disclosure statement delivered under this section changes because of an amendment to a credit agreement, the lender shall deliver a supplementary disclosure statement to the borrower within 30 days after the amendment is made setting out the changed information, subject to subsection (5). Exception (5) If an amendment to a credit agreement consists only of a change in the schedule of required payments by the borrower, it is not necessary for the supplementary disclosure statement to disclose any change to the APR or any decrease in the total required payments by the borrower or the total cost of borrowing under the agreement. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, section 16 by adding the following section: Subsequent disclosure: open credit 29.7 (1) Subject to subsection (2), the lender under a credit agreement for open credit shall deliver a statement of account to the borrower at least once monthly after entering into the agreement. Exception (2) The lender is not required to deliver a statement of account to the borrower if, (a) during the period since the most recent statement of account, the borrower received no advances and made no payments under the agreement; and (b) at the end of the period, (i) the outstanding balance payable by the borrower under the agreement is zero, or (ii) the borrower is in default under the agreement and the lender has notified the borrower that the lender has cancelled or suspended the right of the borrower to obtain advances under the agreement and has demanded payment of the outstanding balance payable by the borrower under the agreement. Information about account (3) The lender shall provide to the borrower a telephone number at which the borrower can make inquiries about the borrower’s account during the lender’s ordinary business hours without incurring any charges for the telephone call. Contents of statement of account (4) A statement of account for a credit agreement for open credit shall state, where applicable, (a) the dates of the period since the most recent statement of account; (b) the balance outstanding under the agreement at the beginning of the period; (c) the amount, description and posting date of each transaction added to the balance outstanding under the agreement during the period; (d) the amount and posting date of each payment or credit subtracted from the balance outstanding under the agreement during the period; (e) the annual interest rate or rates in effect during the period; (f) the amount of interest charged to the borrower during the period; (g) the total amount of all advances and charges charged to the borrower during the period, including purchases made by the borrower and interest; (h) the total amount of all payments made by the borrower during the period; (i) the balance outstanding under the agreement at the end of the period; (j) the credit limit of the borrower under the agreement; (k) the minimum initial payment that the borrower is required to pay under the agreement for the period; (l) the due date for the payment described in clause (k); and (m) all other information about the period that is prescribed by the regulations. Change in interest rate (5) A lender under a credit agreement for open credit who changes the interest rate under the agreement shall notify the borrower of the change, (a) in the next statement of account after the change, in the case of a credit agreement that is not for a credit card; and (b) at least 30 days before the change, in the case of a credit agreement that is for a credit card where the interest rate is not a floating rate. Other changes (6) A lender under a credit agreement for open credit who, pursuant to the agreement, changes any of the matters mentioned in subsection 29.5 (4), other than the interest rate under the agreement, shall notify the borrower of the change, (a) in the next statement of account after the change, if the change is not a material change as determined by the regulations; and (b) at least 30 days before the change, if the change is a material change as determined by the regulations. See: 1999, c. 12, Sched. F, ss. 16, 45 (2). Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule F, subsection 17 (1) by adding the following heading immediately preceding section 30: Assignment of Security for Credit See: 1999, c. 12, Sched. F, ss. 17 (1), 45 (2).