Canadian shoppers fight drip pricing

Class-action suits being filed in B.C. against the practice

‘‘ Companies that have a significant volume of commerce have to show the price in a meaningful way, not in a deceptive and misleading way.

SARO TURNER VANCOUVER LAWYER

If you shop online, you’re likely familiar with the experience — you agree to buy for a certain price, but, by the time you check out, the cost has ballooned with fees and surcharges.

Place a shipping order with Canada Post and you might be hit with a “fuel surcharge” of almost 25 per cent. Buy movie tickets, flowers, make travel plans — all could be subject to hidden fees that are subsequently added to the originally quoted cost.

Critics call it drip pricing, a strategy that has been deemed unlawful. Consumers now have the power to fight back, with multiple class-action lawsuits filed in British Columbia targeting the practice.

Vancouver lawyer Saro Turner, who is involved in some of the drip-pricing lawsuits, says more are likely on the way.

“The average consumer is not a mathematician,” he said in an interview. “Companies that have a significant volume of commerce have to show the price in a meaningful way, not in a deceptive and misleading way.”

Turner said the path to the lawsuits was paved by June 2022 changes to the federal Competition Act, that now explicitly labels undisclosed fees and surcharges that make advertised prices “unattainable” a “harmful business practice.” The amendments mean Canadians can launch class actions against companies that advertise unattainable prices, then tack on mandatory fees as consumers click through to buy products or services.

Turner’s firm has drip-pricing cases pending against online florist Bloomex, travel site Omio and Cineplex. “I think there probably wasn’t an awareness just about how pervasive (drip pricing) was,” he said. “People are upset about it.”

In another lawsuit filed in Vancouver in Federal Court, customers accuse Canada Post of violating the Competition Act’s anti-drip-pricing provision with the fuel surcharge it adds to shipping charges.

On its website, Canada Post offers three price options for regular, express or priority deliveries. For example, posting a three-kilogram package within Vancouver is listed as costing $14.11 for regular, $17.91 for express and $27.47 for priority shipping, before tax.

But, no matter which option is selected, Canada Post then adds a 24.5 per cent fuel surcharge.

The before-tax prices increase to $17.57, $22.30 and $34.20.

Canada’s Competition Bureau has already taken a number of firms and industries to task over drip pricing, for example penalizing vehicle rental companies millions in 2017 and ’18.

In November 2023, the bureau announced an $825,000 fine against ticket reseller Ticket Nation for drip pricing, finding the company misleadingly advertised prices that were inflated up to 53 per cent by undisclosed fees.

In 2019, Ticketmaster was penalized $4 million, and reseller StubHub was fined $1.3 million for similar conduct in 2020.

Last year, Commissioner of Competition Matthew Boswell took Cineplex to the Competition Tribunal over online ticket sales that include a mandatory “online booking fee,” though Cineplex has denied wrongdoing.

“Consumers expect to pay the advertised price. We’re taking action against Cineplex because misleading tactics like drip pricing only serve to deceive and harm consumers,” Boswell said in a news release at the time. “For years, we have urged businesses, including ticket vendors, to display the full price of their products upfront.”

In the case filed against Bloomex in March, the class action represented by Turner’s firm alleges the florist wrongfully adds a $1.99 surcharge to customers’ orders. The lawsuit says the fee is described as being “used to offset rising costs of product, handling and delivery.”

Advertising a lower price before adding the charge is “false and misleading” of Bloomex, the lawsuit says.

The case was filed in Federal Court in Vancouver days after Bloomex was fined $894,000 by the Australian Competition and Consumer Commission for misleading consumers with such pricing, among other things.