Compensation is a financial protection mechanism for the benefit of consumers. Under certain circumstances, the Office de la protection du consommateur can provide you with such compensation.

Compensation is available where a merchant has provided a security to the Office. This compensation may be provided to consumers who file a claim as a result of:

• a business closure or bankruptcy;
• a situation where a tourism service provider (air carrier, hotel, cruise line) has failed to deliver the services purchased from a travel agent;
• a judgment rendered against a merchant that has failed to abide by a law or regulation of which the Office oversees the enforcement.

Sources of compensation

The amounts used to compensate consumers come from the security merchants provide to the Office as a guarantee, in particular through an insurance company, for the Office to issue them or maintain a permit or licence.

These amounts can also come from the Compensation Fund for Customers of Travel Agents, which is an additional protection for travellers. For example, if the merchant is a travel agent that holds a licence from the Office, you may be eligible for compensation from this fund.

Merchants concerned

In order to hold a permit or licence, the following merchants must provide a security:

• travel agents;
• road vehicle dealers;
• road vehicle recyclers;
• itinerant merchants (e.g. door-to-door salesperson, temporary kiosk set up on the street or in a shopping centre, etc.);
• collection agents;
• debt settlement merchants that negotiate with a consumer’s creditors or receive sums of money to distribute to such creditors;
• merchants that operate physical fitness studios (e.g. gyms, physical fitness centres, weight loss centres, etc.);
• merchants that offer additional warranties relating to an automobile or a motorcycle.

Other merchants (e.g. that sell furniture, wedding dresses or swimming pools) must provide a security to the Office. These are merchants that ask not to have to deposit amounts collected from consumers into a trust account, in either of the following situations:

• they receive a sum of money before a contract is entered into; or
• they receive a sum of money for goods to be delivered or services to be provided more than 2 months after the sale.

You can use the Get information about a merchant tool to check:

• whether a merchant holds a permit or licence; or
• whether a merchant is exempt from having to deposit amounts collected from consumers into a trust account.

Examples of situations that could qualify for compensation

To determine whether compensation may be provided, each case is analyzed based on its particularities. Certain conditions must be fulfilled. In particular, a merchant must have provided a security to the Office.

The following are examples of situations in which you may qualify for compensation:

• You have a membership at a gym. You paid for the first 6 months. The gym closes 2 months after you got your membership.
• You purchased a heat pump from a salesperson that came knocking at your door. You paid him the fees to have the unit installed. Since then, you have been unable to reach the merchant to come and install the heat pump.
• You booked a flight to California with a travel agency. The air carrier goes on strike on your scheduled date of departure, and all of its flights are cancelled for the week.

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