Class action launched in Ontario against Peoples Trust over credit card fees

TORONTO – A proposed class action lawsuit has been launched in Ontario against Vancouver-based Peoples Trust Co. and Peoples Card Services LLP, alleging that the small financial services company broke consumer protection laws.

The claim, which has not been proven in court and seeks $100 million in damages, alleges the defendants breached the Ontario Consumer Protection Act by charging unauthorized and illegal fees on prepaid credit cards they sold.

A call to Peoples Trust seeking comment was not immediately returned Wednesday.

The lead plaintiff in the proposed action is Joyce Bernstein, whose lawyers say obtained a prepaid Visa card in September 2010 with the branded name “Vanilla Prepaid Visa.”

The card, which the defendants issued, stated on it that it was valid through April 2014. But in September 2013 and despite never having used it, Bernstein learned that the $35 amount on the card had been seized by Peoples, her lawyers said in a statement issued Wednesday.

“Bernstein alleges, on behalf of the class, that Peoples’ seizure of funds from prepaid credit cards was illegal and impermissible under the Ontario Consumer Protection Act,” the statement said.

It added that the act sets out when certain fees can be charged against the cards and the permissible amounts.

Bernstein is represented by Jordan Goldblatt and Christine Davies of Sack Goldblatt Mitchell LLP and Louis Sokolov of Sotos LLP.

“We believe that people in Ontario are entitled to be treated fairly and transparently in all their consumer transactions,” Goldblatt said, adding in a telephone interview that the total value of money which may have been similarly seized from other consumers in Ontario was not known.

“Obviously, the defendant will be in the best position to tell us what the total value is,” he said.

So far, the plaintiffs lawyers have received no response from Peoples and have yet to set the dates of the class period, but Goldblatt said they expect to do so soon.

He said the first step will be a motion to have the class certified as a class proceeding.

“We are going to try and do so as quickly as possible and hopefully be in court within six months,” he said.

Sack Goldblatt Mitchell and Sotos are also currently involved in a $100-million class action against Bell Mobility Inc., alleging that expiry dates on its pre-paid wireless services are illegal.