In B.C., a growing number of consumers are dissatisfied with the site's "drip pricing" and have filed multiple collective appeals.
"Drripping price" is considered an illegal tactic. It is common to experience agreeing to buy at a certain price, but the cost at checkout spikes due to various fees and add-ons, such as a "fuel surcharge" of nearly 25% when sending a package at Canada Post, and hidden fees such as platform fees, handling fees, etc., when buying movie tickets or airline tickets.
Saro Turner, a Vancouver lawyer involved in such lawsuits, said that "the average consumer is not a mathematician, and companies with a lot of business activity must be 'clearly priced', not deceived and misleading".
Turner said there will be more related class actions in the future. In June 2022, the federal government amended the Federal Competition Act to pave the way for prosecutions against drip pricing. The amended Act explicitly requires merchants to disclose any surcharges that would otherwise be considered "harmful business practices".
Currently, there have been a number of class action lawsuits in Canada involving "garbage fees". Let's take a look at some of the companies that have been sued, and perhaps you may have found yourself using their services, or perhaps you have been unhappy with the "hidden fees that are charged indiscriminately".
Canada Post
The Federal Court of Vancouver filed a lawsuit against Canada Post over consumer allegations that Canada Post violated the Anti-Irrigation Pricing Provisions of the Competition Act by adding a fuel surcharge to the freight.
On its website, Canada Post offers 3 price options for regular, express, or priority delivery. For example, the cost of sending a 3kg package in Vancouver is $14.11 for the regular fee, $17.91 for express delivery, and $27.47 for priority delivery, excluding taxes.
But regardless of which option is chosen, Canada Post adds a 24.5% fuel surcharge. This results in tax-exclusive prices increasing to $17.57, $22.30 and $34.20.
Car rental companies
Previously, the Competition Bureau of Canada had fined a number of car rental companies millions of dollars. For example, in 2018, the Competition Bureau found that four car rental companies were advertising discounts that misled consumers into believing that they were receiving a percentage of the discount, when in fact the discount was not applied to the total amount and that the additional mandatory fees still had to be paid in full.
Ticket resellers
In November, the Competition Bureau announced a $825,000 fine on ticket reseller Ticket Nation for driving prices up to 53% through undisclosed fees.
Ticketmaster was also fined $4 million in 2019, and reseller StubHub was fined $1.3 million in 2020 for similar conduct.
cinema
The Competition Bureau sued Cineplex in May 2023, alleging that the company illegally collected fares purchased online. Cineplex charges an additional $1.50 per online ticket.
Cineplex Inc. is said to have earned nearly $40 million from online booking fees.
Online florist
In March, Bloomex, an online seller of Kao Zhang, was described as "false and misleading" for mistakenly adding a $1.99 surcharge to a customer's order.
Bloomex was fined $894,000 by the Australian Competition and Consumer Commission for the same reason, and a few days later, the federal court in Vancouver also sued it.
Online transportation booking platform
In March, Omio, an online transportation booking platform, was sued for falsely advertising a lower price before adding a "service fee" to the final price.
For example, a flight ticket from Vancouver to Toronto was initially advertised on Omio's website for $281, then the cost increased to $300.75 after the service fee was added.
More: Banks, airlines, telephone operators
In addition, the Trudeau government said it would crack down on "unfair" fees across the board as part of Tuesday's fall economic statement to bring down costs for Canadians. The scope of the review covers banks, airlines, and telephone operators.
Bill C-56, introduced by Deputy Prime Minister and Finance Minister Chrystia Freeland in September, would increase the powers of the Federal Competition Agency and is currently under consideration in Parliament after reaching an agreement with the NDP to increase penalties for anti-competitive conduct.