Ignor the shoplifting damages scam

Sometime in February 2008, a 16-year-old girl stole a $6 ring from the Zellers store in the Northland Mall on Highbury Avenue in London, Ontario. The teen was nabbed and then detained by store security. The police were called and showed up, as did the girl's mother. No charges were laid, but the girl was banned from Zellers for a year.

A few weeks later, the girl's mother received a letter from a Toronto-based lawyer representing Zellers. The letter cited the shoplifting incident and stated the retailer "has the right to claim damages from you as a parent or guardian of the young person for failing to provide reasonable supervision."

The letter stated the retailer was prepared to settle its claim for damages in return for $500, but this amount might increase if payment wasn't received by mid-March. A similar letter sent to another mother demanded $475 for $5 worth of candy.
Such ‘recovery costs’ sent to shoplifters or their parents from lawyers are quite common in Ontario and for that matter, other provinces.

The Hudsons Bay Company has put in place a "civil recovery program" that "requires a shoplifter to pay for a portion of the costs incurred as a result of their apprehension."

According to the Retail Council of Canada (RCC), theft costs the country's retailers $3 billion a year ----- or nearly $8 million a day. The RCC attributes about 55 per cent of those losses (or ‘shrinkage’) to customers, 26 per cent to employees and 19 per cent to administrative errors.

A similar case took place in Alberta in 1999. The court said in part; “I have an additional difficulty with the plaintiff's claims and which involves the allocation of the damages sought from the defendants in these proceedings. I presume that not all of the plaintiff's shortages are attributable to shoplifting and that not all shoplifters are apprehended. If I am correct in this assumption, then how can the plaintiff, with any degree of certainty, allocate any portion of the cost of the program against these defendants?”

There was another case held in Manitoba in which Zellers was claiming damages against the parents of the child. In that case, their child had been apprehended shoplifting from Zellers. The store's solicitor wrote to the parents of the child claiming that Zellers "…has a legal right to claim Civil Restitution from you…" and then demanding "Restitution for costs of incident including damages and costs: $225.00." The plaintiff paid the amount claimed and then commenced proceedings to recover back the amount paid, alleging they made a mistake in paying Zellers. Judge Jewers said at paragraph 12 of his decision; "In my opinion, Zeller’s claim was not merely a doubtful claim - it was an invalid claim."

The director of community legal services at the University of Western Ontario says his advice to people who receive such claims is simple: Ignore it.

"We represent people at the clinic who are charged with shoplifting and they usually get these letters," says Doug Ferguson, an adjunct professor with UWO's faculty of law. "We tell them to ignore it. And none of our clients have come back to us and said they've been sued." When I was practicing law, I had clients come to me with such letters from lawyers demanding ‘recovery costs’. I sent each of the lawyers a letter telling them that I told my clients to ignore their letters. None of my clients were sued either.

It's simply not worth it for a corporation to go to court (to recoup) $500 since it would cost more than that to show up. Even if they used a law student or a paralegal to appear on behalf of the department store, it would cost the corporation more than that to show up and the costs awarded to the advocate would be $300 as legal fees if the damages claimed exceed $500 and nothing in legal fees if the damages claimed are less than $500.

Obviously, to go after shoplifters or their parents civilly is just an intimidation tactic used in hopes of recovering some of their administrative losses.

The courts in the past for the most part have questioned the retailers' claim that processing a shoplifter is costly, arguing the stolen property has been recovered, the stores already have security personnel and equipment in place and there are no significant other costs to processing a shoplifter.

Nowadays, if a child is apprehended as a shoplifter, the retailers are simply taking advantage of the Parental Responsibility Act, which was enacted by the Ontario government in 2000 and holds parents financially responsible for property loss, damage or destruction intentionally caused by their children under 18 years of age. The maximum allowable claim is $10,000.

Section 2 of the Parent Responsibility Act of Ontario states;

"Where a child takes, damages or destroys property, an owner or a person entitled to possession of the property may bring an action in the Small Claims Court against a parent of the child to recover damages, not in excess of the monetary jurisdiction of the Small Claims Court (a) for loss of or damage to the property suffered as a result of the activity of the child; and　(b) for economic loss suffered as a consequence of that loss of or damage to property."

That might apply if the item stolen from the store was not recovered, but when the shoplifter has been apprehended and the item has been recovered, the section 2 simply doesn’t apply.

The Act also says:
“The parent is liable for the damages unless the parent satisfies the court that,(a) he or she was exercising reasonable supervision over the child at the time the child engaged in the activity that caused the loss or damage and made reasonable efforts to prevent or discourage the child from engaging in the kind of activity that resulted in the loss or damage….”

That aspect of the legislation won’t help the store at all. The key words in this part of the act is; “exercising reasonable supervision over the child at the time the child engaged in the activity that caused the loss…”

Parents are not expected to watch over their school-age children 24 hours a day every day of the week. For example, suppose a child at the age of twelve; goes to a store after school and steals a ball-point pen. Meanwhile, both parents are at work at this time. Are they expected to exercise reasonable supervision of their child at the moment their child steals the item from the store? Obviously not.

Where it would apply is if the child is with them in the store at the time the child steals the pen. It could be then said that they were not exercising reasonable supervision of their child at that moment. However, the store would still have to prove damages after the item was returned and as I said earlier, that would be difficult, if not impossible.

There are situations where the victims of children who cause damage or loss can successfully sue the parents. For example, a child beats another child and cause injuries; or a child throws a rock through a neighbour’s window. These are vicious acts and one may concluded that any child that does that has not been brought up properly.

However, if a child is playing baseball in his back yard and the baseball goes though a neighbour’s window, that act by itself is not actionable because the child simply didn’t know any better. However, if it happens again after the parents have been told about the incident, then they can be sued because they have not exercised reasonable supervision of their child whom they knew was stupid enough to play baseball in his back yard knowing the risk of damaging a neighbour’s window like the last time.

In summary, let me say that when my children were afraid of the boogey man when they were small, I turned on the light and said “BOO!” and the boogie man disappeared.

If as a parent, you get one of those ridiculous letters from a lawyer, send a letter back with only this one word “BOO!” and like monsters in the dark, he or she will disappear.

Please Note: What follows is an email message I received from one of my readers.

I just read your article online about the recovery letters that are being sent from Zellers Inc. My daughter did not get caught shoplifting, but was with a girl who did (according to the police) and I still got a recovery letter demanding 500$ as a "settlement amount". I am glad I read your blog, I will ignore it since there is really nothing to recover.

Here is another scam taking pace in the United States.

Store security offers shoplifters a choice: Take $500 online class or we’ll call the police. Some of the country’s biggest retailers, from Walmart to Bloomingdale’s to Abercrombie & Fitch, are being accused of extorting $500 from shoppers caught swiping merchandise.

The bizarre twist is spelled out in a class-action lawsuit filed in federal court in San Jose that came about when a mother shopping for a birthday barbecue with her kids was stopped while leaving the self-checkout at Walmart. The retailer’s loss-prevention officers took her aside and accused her of not paying for hot dog buns and a water bottle. They gave her a choice: Cop arrest for shoplifting or alternatively, agree to pay $500 for an online class aimed at setting her on the straight and narrow. 

No matter how you look at that threat, it is a form of blackmail  and black mailing anyone with respect to a crime anyone  committed is also a crime.                                  

A Utah company provides classes called Corrective Education Company which they say is a win for everyone. The accused shoplifter avoided an arrest, jail and criminal record while learning crime doesn’t pay. The retailer got justice and the  cops stay focused on more pressing needs. I have to admit that it makes some sense. What shoplifter would shoplift again if he or she had to fork out $500 for shoplifting?

I should point out that in the City of Toronto, in Canada, if the police are called by store security, the shoplifter will be arrested and  charged with theft  under $5000.  If the shoplifter can show ID which gives the police the home address, the shoplifter will be released with a form that will tell the shoplifter where and when to go to court. In court, the judge will not pass a guilty sentence on the shoplifter providing the shoplifter agrees to attend a one hour session relating to shoplifting. If the shoplifter attends the session, the conviction will be removed and the shoplifter has no criminal record pertaining to the shoplifting event. Further, the shoplifter doesn’t have to pay for the session.