Prepaid Credit Cards Class Action
This case alleges that the defendants breached Ontario’s consumer protection laws by extracting unauthorized and illegal fees from the prepaid credit cards they sold.
The defendants are financial service providers that issue pre-paid payment cards. The defendants imposed a series of fees that the plaintiff alleges are illegal and unenforceable. In addition, the defendants imposed expiry dates, after which balances are seized. The plaintiff alleges that these practices are also illegal.
The case has been certified by the Court as a class action.
You are automatically included in the class if you had a prepaid card from the defendants between 2012 and 2014.
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Prepaid Credit Cards Updates
- May 5, 2020: In light of the COVID-19 emergency, the Court of Appeal will hear this matter remotely on June 9-10, 2020. The parties’ appeal materials are available here.
- December 13, 2019: The hearing of the defendant’s appeal and the plaintiff’s cross-appeal has been adjourned to June 9, 2020.
- September 25, 2019: The Court of Appeal for Ontario has scheduled the defendant’s appeal and plaintiff’s cross-appeal to be heard on February 5, 2020.
- August 7, 2019: Justice Perell awarded the plaintiffs $1.23 million in prejudgment interest, and postjudgment interest at 3% per annum from May 13, 2019.
- June 19, 2019: On June 12, the defendant delivered a notice of appeal. On June 19, the plaintiff delivered a notice of cross-appeal. The defendant’s appeal concerns its liability for fees charged and balances seized on Single Load Prepaid cards. The cross-appeal relates to fees charged by the defendant on its reloadable cards.
- May 14, 2019: On May 13, 2019, Justice Perell granted judgment to the plaintiff in respect of illegal fees charged and unused balances seized by the defendants on Single Load Prepaid (SLP) cards. Justice Perell ordered the defendants to repay $15,330,000, and to pay $1.5 million in punitive damages.
- April 10, 2019: Justice Perell of the Ontario Superior Court of Justice heard the plaintiff’s summary judgment motion on April 4-5, 2019. A further update will follow once His Honour’s reasons for decision are released.
- March 12, 2019: The plaintiff’s summary judgment motion will be heard on April 4-5, 2019.
- January 31, 2017: Justice Perell of the Ontario Superior Court of Justice certified a class action against Peoples Trust Company and Peoples Card Services LLP. The case, brought on behalf of thousands of Ontario consumers alleges that prepaid “credit” cards issued by the Peoples Trust Company violate the Ontario Consumer Protection Act by charging illegal fees and seizing “expired” balances. The case will now proceed to a hearing on the merits. Click here to read a copy of the certification decision.
- November 29, 2013: Sotos LLP and Sack Goldblatt Mitchell LLP, co-counsel for the proposed class, filed a Statement of Claim in the Ontario Superior Court of Justice.
Prepaid Credit Cards Documents
The Court of Appeal for Ontario will hear arguments in this case on June 9-10, 2020. The defendants are appealing the judgment against them in respect of single load cards (the “Appeal”). The plaintiff is cross-appealing the decision not to award damages in respect of reloadable cards (the “Cross Appeal”).
The parties have filed the following materials (PDF):
- Factums (written arguments) on the Appeal:
- Factums on the Cross-Appeal:
- Evidence & relevant documents:
- Case law & authorities:
Pleadings and Decisions
- Reasons for Decision – Costs (October 21, 2019)
- Reasons for Decision – Postjudgment and Prejudgment Interest (August 7, 2019)
- Reasons for Decision (May 13, 2019)
- Order of Notice of Certification of a Class Proceeding (June 5, 2017)
- Schedule A of Notice of Certification of a Class Proceeding (June 5, 2017)
- Certification Order (March 31, 2017)
- Statement of Claim (November 29, 2013)
Prepaid Credit Cards News
Frequently Asked Questions
A class action is a special form of lawsuit in which one plaintiff brings a claim against one or more defendants based on allegations which are common to a group, or class, of people. In order for the action to become a class action, it must proceed through a stage known as “certification”.
A statement of claim is issued on behalf of a “representative plaintiff”. The representative plaintiff’s role is to work with class counsel to bring the action forward and to represent the class members in court.
In order for an action to proceed on behalf of the entire class, a judge must decide (among other things) whether the members of the proposed class have common issues, and whether a class action is the preferred way to resolve the issues. The process to decide these issues is known as the “certification motion”. If the judge is satisfied that the case meets all of the requirements for certification, he or she will issue an order which certifies the action as a class action.
No. If the lawsuit is certified, and you are included in the class as defined, you are automatically included in the lawsuit.
No. We will work primarily with the class representative.
Those who do not wish to remain in the class will be given the option to opt-out by sending an opt-out form at the appropriate time to us.
Certification as a class action will enable us to prove the facts in a single lawsuit rather than in numerous individual lawsuits. This has obvious benefits to the class members and to the courts.
There is no timeframe. We will move the case forward diligently but it can take a considerable period of time to reach trial.
Many class actions settle and thereby remove the need for a trial. However, we cannot predict with any certainty whether or not there will be a settlement in a given action.
The chances of “winning” can never be accurately predicted.
Class action lawsuits are typically brought on a contingency fee basis. This means that the lawyers will only be paid if the action is successful at trial or results in a settlement in favour of the plaintiffs. Legal fees would then be paid out of the settlement or judgment proceeds as approved by a judge.
Disbursements (i.e. out-of-pocket expenses, including expert reports) may be dealt with in one of two ways.
Most commonly, the lawyers will absorb the cost of disbursements. The lawyers may seek funding assistance from the Class Proceeding Fund, which may provide funding for disbursements if granted.
In some cases, disbursements may be funded by the class members, including the class representative. This typically occurs in smaller class actions brought on behalf of an organization or network of individuals where each member of the class is easily identifiable and known to the representative plaintiff. If the class action is successful, amounts advanced for disbursements are re-paid from the proceeds of any judgment or settlement to class members (and others).
Only the class representative may be liable for costs of the common issues portion of the action if it is unsuccessful.
A “payout” or an award for damages is never certain.
The action may settle or it may proceed to trial, at which time a judge will determine the amount of damages, if any, to which the class members are entitled to. Regardless, the amount of “payout” cannot be predicted, and we cannot predict when the action may settle or when the trial will conclude.
If the lawsuit is certified as a class action, you will receive a formal notice from the court explaining the nature of the case and providing you with the opportunity to opt out if you wish. General information about the lawsuit will be posted on Sotos LLP’s website at https://www.sotosclassactions.com.
We ask that you keep a copy of any documents, correspondences, records, invoices, receipts, etc. that you feel might be relevant to your individual claim in the class action. If there is a “payout,” this documentation may be required in order to support your claim for compensation.
It is not required that you send any documents to us at this time.
Join this Class Action
COURT AWARDS $16.8 MILLION TO ONTARIO CONSUMERS
On May 13, 2019, the Superior Court of Justice granted judgment to the plaintiffs.
In a ground-breaking class action on behalf of Ontario consumers, Justice Perell ruled that the defendant, Peoples Trust, must repay $15.3 million of fees and unused balance that it seized from consumers of its prepaid gift cards. He also ordered the defendant to pay $1.5 million in punitive damages. Justice Perell declined to award any damages in respect of defendant’s reloadable prepaid cards. The defendant is appealing the decision.
To read the decision, click here.