What retailers should be aware of in developments in advertising law
Having just survived peak shopping season, retailers — hoping to start 2018 off on a high note — are going to start vying for the public’s attention again very soon.
As a result, it is important to be sure that what promotional materials they create are true, accurate and reliable. We can take lessons from some of the most interesting legal developments in consumer advertising in 2017.
The starting point for most laws in Canada relating to false or misleading advertising is the federal Competition Act. The Act is administered by the Competition Bureau and sets out both civil and criminal prohibitions involving an array of offences.
Price claims come up often in the matters reviewed by the Bureau, and one of those that most of us can relate to pertains to whether an advertised price is an accurate reflection of what a consumer will pay, or whether there are hidden or undisclosed fees. The Budget and Avis car rental companies learned this lesson when the Bureau determined that they had advertised rental prices that were completely impossible to ever be accessed by consumers. The Bureau accordingly imposed an administrative monetary penalty of $3 million. In fact, the mandatory, undisclosed fees led to some rental costs exceeding the advertised base price by as much as 20 per cent. The rental companies had been advertising discounts off the base price of rentals, but not off the mandatory undisclosed fees. Compounding their liabilities, the companies were leading consumers to think that these fees were government imposed when they were not. The lesson for retailers: make sure all mandatory fees are clearly and accurately disclosed.