July 10, 2013
Competition Bureau takes action against Leon's, The Brick for deceptive promotions
OTTAWA - The Competition Bureau has taken legal action against two of Canada's largest furniture and home appliance retailers, Leon's Furniture Limited and The Brick Ltd., for what the Bureau believes are deceptive marketing practices.
The Bureau's investigation into promotions that offered 'buy now, pay later' options on purchases revealed, among other things, that many customers were required to pay up-front fees, despite the 'buy now, pay later' promotions.
As a result, the Bureau filed an action with the Ontario Superior Court of Justice seeking an end to this type of deceptive advertising, refunds for customers who paid so-called administration or processing fees, and administrative monetary penalties from both Leon's and The Brick.
"Canadian consumers must receive clear and accurate information about what must be paid at the time of purchase, and what the actual cost of a particular item is if they use a deferred payment option," said John Pecman, Commissioner of Competition. "Retailers cannot hide details of additional fees in lengthy disclaimers."
In this case, the retailers buried details of the additional up-front fees in fine print, which led to the final price of a product being higher than the advertised price for consumers who used a deferred payment option. For example, depending on applicable fees due at the time of purchase (which may include processing or administrative fees, delivery fees and taxes), a customer wanting to defer payment on a $1,500 sofa could end up paying more than $350 at the time of purchase, even though the advertisements clearly state that no payment is required at the time of purchase.
"When a price is offered to consumers for a product, it must be both clear and accurate," said Lisa Campbell, Deputy Commissioner of Competition, Fair Business Practices Branch. "Including a lengthy fine-print disclaimer is no licence to advertise prices that are simply unavailable to consumers using a deferred payment option."
The Bureau's action covers all brands operated or franchised by Leon's Furniture and The Brick, including United Furniture Warehouse.