Lawyers urge public to read fine print on gift cards
Law firms behind two proposed class-action lawsuits launched against George Weston Ltd. and Loblaw Companies Ltd. for an alleged bread price-fixing arrangement are warning people not to blindly accept a $25 gift card offered by Loblaw.
“(Consumers) need to read the fine print very carefully,” said Jay Strosberg, partner at Strosberg Sasso Sutts law firm.
The Windsor firm is representing plaintiffs in Ontario and other parts of Canada, except Quebec.
Strosberg said he believes consumers are being offered less than they’ve lost through the pricefixing.
“If you were entitled to a thousand dollars and you were offered a $25 gift card, what would you do?” he said.
“If Loblaws thought that they were making people whole by the $25, they would tell them that. But that’s not what they’re saying. As a matter of fact, they’re not telling anybody anything,” he said. “So you can say with a reasonable amount of certainty that people would be entitled to a lot more than $25.”
“Loblaw has not provided any details of what consumers will be expected to give Loblaw in exchange for this gift card,” David Wingfield, also of Strosberg Sasso Sutts law firm, said in a press release issued Wednesday.
“Neither has Loblaw told consumers what it knows about how much bread prices were inflated as a result of its participation in the price-fixing conspiracy. Therefore, Loblaw is leaving consumers in the dark about what the gift card (program) is really intended to do,” he said.
Strosberg said the $150 million write down or cost of Loblaw’s gift card offer is just the “starting point” for what consumers can recover in Canada.
“I don’t believe that you would engage in a 14-year price fixing cartel unless there was a lot more than $150 million at stake because people can go to jail for this kind of thing,” Strosberg said.
“I believe that the number is going to be much larger than that and that consumers need to be very cautious before exercising their rights to receive this gift card because Loblaws hasn’t told people what they’re going to want in return.”
The fine print could include a release restricting participants from sharing in a class action or suing the company.
Strosberg said it may even limit a person’s right to make a claim against other stores allegedly involved in the price fixing.
“Consumers need to be very careful about the legal rights that they’re giving up,” he said.
Kevin Groh, vice-president of corporate affairs and communication for Loblaw, said in an email to the Star that the class action will not impact customer’s access to gift cards.
“Accepting this offer will not affect customers’ right to participate in any class action or to receive any incremental compensation that may be awarded by the court,” Groh said.
“The Loblaw Card Program is designed so that customers who obtain the cards will not be disadvantaged in terms of anything the courts may do.”
In response to questions about the total cost to consumers of the price fixing and how the $25 compensation figure was arrived at, Groh said: “It would be inappropriate for us to comment on details that may relate to the bureau’s investigation.”
Michael Vathilakis of Montrealbased law firm Renno Vathilakis Avocats Inc., one of the firms behind the Quebec lawsuit, said customers should ensure they’re aware of any provisions associated with the card before registering for it.
“Before you register, be aware of what it is you’re signing over,” Vathilakis said Wednesday. “Make sure you’re not relinquishing any rights.”
Two class-action lawsuits have been filed, in Quebec and Ontario, against Loblaw Companies Ltd. and George Weston Ltd., among others, alleging the companies conspired to fix the price of packaged bread in Canada since 2001.
In a statement issued this month, the two companies acknowledged the arrangement and confirmed they alerted the Competition Bureau after discovering the alleged scheme in 2015.
“This sort of behaviour is wrong and has no place in our business or Canada’s grocery industry,” said the chairman of both companies, Galen G. Weston, in a statement last week.
“This should never have happened.”
At the same time, Loblaw announced the $25 gift card as a sort of goodwill gesture to any eligible customers.
But Vathilakis and the other law firms behind the lawsuits are warning that conditions could be hidden in the gift card’s fine print.