You learn that your favorite artist is coming to give a show in Montreal. You jump at the chance to see it live and decide to buy tickets online. The price of the tickets is indicated when you choose your seat, but at the time of payment, additional and mandatory fees for the delivery of the tickets are added to the initial price.
Does the merchant have the right to do so by displaying only part of the amount to be paid? Is it possible to bring an action against traders acting in this way?
Me Lambert looks into this issue and explains your rights as a consumer regarding the accuracy of the prices displayed.
The law and the accuracy of prices
The majority of the provisions regulating the means of promoting a product or service are found in the Consumer Protection Act. As a result, this law regulates what merchants must absolutely include in their advertising, as well as what they are not allowed to do.
Prohibitions under the Act
In particular, article 224 of that law strictly prohibits all traders or manufacturers from charging a higher price than that which is displayed. The amount announced must therefore include all the costs that the consumer will have to pay in order to obtain the good or to be able to benefit from the service in question.
In addition, the law requires merchants to highlight the full amount more than the various sums that compose it. For example, if an advertisement offers to buy a property and pay for it in installments, the total price of the property must be more apparent than the sum of the payments. The same principle applies if you rent a hotel room and additional maintenance or food charges apply. The company, on its website, must then expose the total price of the room, including all these costs, for lack of contravening the law.
In addition, merchants wishing to formulate an advertising message have the obligation to ensure that it is clear, legible and understandable. They are also prohibited from omitting, one or more important facts related to a product while promoting it. They therefore do not have the right to omit the additional costs associated with the object of the sale.
The only exception is sales taxes. Indeed, under the law, merchants are not required to include them in their advertised prices. This provision applies to both Quebec taxes (QST) and federal taxes (GST).
The purpose of the provision
Several objectives are conveyed by this provision, but it is mainly a question of prohibiting merchants from luring a clientele by announcing incomplete and/or fragmented prices, lower than those of their competitors, while adding additional costs at the last moment. This provision then allows the consumer to properly compare the price of each of the products offered on the market, and thus, to make his purchases in an informed manner. This measure also ensures that the customer is aware of the full price of a good or service before proceeding to the checkout.
Therefore, any mandatory fees applicable to the sale of a good or service, in addition to the value of the product itself, must also be included in the advertised price of the product. We are talking here about fees such as service fees, surcharge fees, shipping costs, activation fees, etc.
Objective criterion
The applicable test for finding the presence of hidden charges is an objective criterion. It is therefore sufficient to compare the price announced by a merchant to the amount of the final invoice to determine whether hidden fees are imposed on the consumer. It is not necessary to demonstrate that the consumer was misled or that he was actually taken by surprise by the hidden charges.
A merchant cannot therefore defend a warning that he has offered to the consumer about the additional fees, whether the warning is offered orally or at a preliminary stage of an online transaction. Indeed, all the fees applicable to a transaction must be clearly indicated in the advertised price of the product and not simply be the subject of a warning offered to the consumer once on the spot or under an asterisk easily missed or skipped by the latter. It is therefore understandable that references such as “applicable service fees” or “plus service fees”, among others, do not allow you to escape the CPA.
In addition, section 262 of the PCA provides that a consumer may not waive a right under the CPA. Therefore, even a consumer who knowingly chooses to pay hidden fees retains a remedy against a offending merchant. For example, a consumer who pays a 3% surcharge fee for the purchase of a vehicle made by credit card therefore retains his recourse against the seller, even if he has been previously warned about the fees applicable specifically to this method of payment.
Recourse in case of fault of the merchant
When a merchant fails to comply with his advertising obligations and non-compliance with the advertised price of a good or service, several remedies are available to consumers, including:
- Reduction of obligations: the consumer may request that the amount he pays be reduced;
- Nullity of the contract: the consumer may request to cancel the contract;
If the illegal conduct of the merchant causes any prejudice to the buyer, the latter may, in addition, claim a sum to repair the damage suffered as compensatory damages. The merchant is also exposed to criminal penalties, so he may have to pay punitive damages.
With regard to consumer contracts, the Civil Code of Québec also provides for the cancellation of a contract in articles 1436 and 1437. In particular, buyers are protected from illegible, incomprehensible and unfair terms. However, these measures must be distinguished from those provided for in the Consumer Protection Act, which offers much broader protection. Indeed, the articles of the Civil Code deal only with consumer contracts and can only be useful if damage has occurred as a result of the wrongful conduct of the trader.
Case law and examples
In 2010, a class action lawsuit was filed against Air Canada for illegal pricing practices when booking airline tickets online. In that decision, the Court approved the action, reminding Air Canada that the purpose of the act is to require merchants to disclose the full price and is intended to sanction the harmful practice of fragmenting the amounts owed.
In another case involving the sale of a vehicle, the Court demonstrated an important principle when dealing with consumer law. The car retailer, at the time of paying for the car, charged 3% of the price of the vehicle displayed as an additional fee in order to pay the fees associated with the use of the credit card. However, the buyer knew that such charges would apply and decided to contract anyway. In rendering the decision, however, the court emphasized that the Consumer Protection Act is a law of public order, that is, it is not possible to waive the rights it protects. Therefore, knowing the existence of the additional costs does not cause any prejudice to the claims that the consumer could bring against the trader, provided, of course, that these amounts are not announced when the product is promoted.
If you feel you have been the victim of such a prohibited practice, know that you are probably not alone. Do not hesitate to contact our firm to file a lawsuit and obtain compensation on your behalf and on behalf of all other victims.
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