If you’re shopping online and find a surprise fee has been tacked on to the price at checkout, the Competition Bureau wants to hear from you.
Undisclosed fees and surcharges, also known as “drip pricing,” were recently deemed unlawful under the Competition Act, which allows the bureau and consumers to fight back with fines and lawsuits over the practice.
Processing fees, booking fees, cleaning fees and administrative fees are examples of drip pricing that the Competition Bureau calls an “ambush” on consumers in an advisory published this week.
If the mandatory fees are not included up front in the sale price and suddenly make the price of that product or service unattainable, the bureau says that business may be breaking the law.
“Misleading claims like drip pricing only serve to deceive and harm consumers,” the advisory says. “They make it difficult to comparison shop and can lead you to make uninformed decisions.”
While most drip pricing involves fixed surcharges or fees, the bureau says a variable fee “could still raise concerns under the law.”
Canadians who come across hidden or undisclosed fees that affect the price they pay at checkout should report it to the Competition Bureau online, the advisory says.
The Competition Bureau has taken a series of actions against businesses in recent years over drip pricing.
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Last year, the Commissioner of Competition, Matthew Boswell, took Cineplex to the Competition Tribunal over online ticket sales that include a mandatory “online booking fee” for movie tickets, a fee that doesn’t appear until checkout.
Boswell claims Cineplex has made $40 million from the practice since 2022, though the company has denied wrongdoing.
“For years, we have urged businesses, including ticket vendors, to display the full price of their products upfront,” the commissioner said in a news release at the time the challenge was announced.
In November 2023, the bureau announced an $825,000 fine against ticket reseller TicketNetwork for drip pricing, finding that the company misleadingly advertised prices that were inflated up to 53 per cent by undisclosed fees.
Ticketmaster was penalized $4 million in 2019, and reseller StubHub was fined $1.3 million for similar conduct in 2020.
Amendments to the Competition Act passed in 2022 now explicitly label undisclosed or “misleading” fees and surcharges that make advertised prices “unattainable” as a “harmful business practice.”
Government-imposed charges like sales taxes are exempt from the new rules.
The changes mean Canadians can file class-action lawsuits against businesses that advertise attainable prices, but then tack on additional fees before customers finish their purchase.
In a lawsuit filed in Vancouver in Federal Court, customers accuse Canada Post of violating the anti-drip-pricing provision with the fuel surcharge it adds to shipping charges. The lawsuit argues the surcharge, which amounts to nearly 25 per cent of the shipping price, is applied regardless of whether the customer chooses regular, express or priority delivery.
Drip-pricing lawsuits have also been filed against the travel site Omio and the online florist Bloomex.
—With files from the Canadian Press
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