Canadians should be able to trust that the price they see is the one they pay.
When a price is unattainable, because consumers must pay additional charges or fees to buy a product or service, it affects their abilities to make informed decisions.
This practice, known as drip pricing, is false or misleading under the Competition Act, unless the additional fixed charges or fees are imposed by the government, such as sales tax.
As a result of amendments to the Competition Act in June 2022, drip pricing is now expressly recognized as a harmful business practice under the law.
Consumers often refer to the price when comparing similar offerings or making purchasing decisions. When the represented price is inaccurate, it can lead consumers to make misinformed decisions and can result in unfair outcomes for honest competitors.
Best practices for businesses:
- Never promote an unattainable price. Promoting a price that is not attainable due to fixed charges or fees that consumers must pay is against the law, unless it is a charge or fee only in an amount imposed by an act of Parliament or the legislature.
- Remember that if a price is unattainable because consumers must pay a charge or fee that varies rather than one that is fixed, the price claim can still raise concerns under the law if the general impression conveyed is materially false or misleading. A price claim is “material” if it leads a person to act in a specific way, such as buying or using a product or service.
- Build and maintain a credible and effective compliance program. For more information, visit the Compliance Hub.
- When making a price claim, ask yourself:
- Will consumers be able to trust that the price they see advertised is the one they will pay?
- Will they be surprised by extra fees?
Penalties and remedies for non-compliance
The consequences associated with being found to have engaged in deceptive marketing practices depend on whether the conduct falls under the civil or criminal provisions of the Competition Act. Learn more about the penalties and remedies.
Further reading
- Deceptive marketing practices—Cases and outcomes
- Advertising dos and don’ts
- Sale above advertised price
- The Deceptive Marketing Practices Digest — Volume 5
- The Deceptive Marketing Practices Digest — Volume 6
- Guide to the 2022 amendments to the Competition Act
- False or misleading representations
- Competition Bureau Fee and Service Standards Handbook for Written Opinions