The Competition Bureau has brought a lawsuit in the Ontario Superior Court against two of Canada's largest home furniture retailers, Leon's Furniture Limited and The Brick Ltd. seeking, among other things, refunds for customers who participated in “buy now, pay later” promotions, as well as Administrative Monetary Penalties under the Competition Act.
In a press release issued July 9, 2013, the Competition Bureau stated that its investigation revealed that customers had to pay up-front fees to participate in the promotion, notwithstanding the “pay later” promise, resulting in an item costing customers more than the advertised price. The example given in the press release is a sofa advertised at $1500. Customers wanting to defer payment on the sofa could end up paying more than $350 at the time of purchase depending on processing or administrative fees, delivery fees and taxes.
The Commissioner of Competition, John Pecman stated in the release:
The Competition Bureau is alleging that Leon’s and the Brick buried details of the up-front fees and the real cost to customers of furniture bought using deferred payment in fine print.
This is consistent with the Competition Bureau’s policy of ensuring consumers are aware of the amount they are actually paying for a product. As an example, in 2009, the Competition Bureau issued Consumer Rebate Promotions enforcement guidelines, which prohibit price rebates that disguise the price customers pay at the time of purchase.
The Competition Bureau’s press release can be found at: http://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/03582.html.