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Sick of extra fees online, or 㽶Ƶֱdrip pricing㽶Ƶֱ? Canadian shoppers are fighting back

Place a shipping order with Canada Post and you might be hit with a 㽶Ƶֱfuel surcharge㽶Ƶֱ of almost 25 per cent
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Changes to the federal Competition Act now explicitly label undisclosed fees and surcharges a 㽶Ƶֱharmful business practice,㽶Ƶֱ leading to lawsuits against online retailers, movie theatres and even Canada Post. The Canada Post logo is seen outside the company㽶Ƶֱs Pacific Processing Centre, in Richmond, B.C., on June 1, 2017. THE CANADIAN PRESS/Darryl Dyck

If you shop online you㽶Ƶֱre likely familiar with the experience 㽶Ƶֱ 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 㽶Ƶֱfuel surcharge㽶Ƶֱ of almost 25 per cent. Buy movie tickets, flowers, make travel plans 㽶Ƶֱ 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.

㽶ƵֱThe average consumer is not a mathematician,㽶Ƶֱ he said in an interview. 㽶ƵֱCompanies that have a significant volume of commerce have to show the price in a meaningful way, not in a deceptive and misleading way.㽶Ƶֱ

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 㽶Ƶֱunattainable㽶Ƶֱ as a 㽶Ƶֱharmful business practice.㽶Ƶֱ

The amendments mean Canadians can now launch class actions against companies that advertise unattainable prices, then tack on mandatory fees as consumers click through to buy products or services.

Turner㽶Ƶֱs firm has drip-pricing cases pending against online florist Bloomex, travel site Omio, and Cineplex.

㽶ƵֱI think there probably wasn㽶Ƶֱt an awareness just about how pervasive (drip pricing) was,㽶Ƶֱ he said. 㽶ƵֱPeople are upset about it.㽶Ƶֱ

In another lawsuit filed in Vancouver in Federal Court, customers accuse Canada Post of violating the Competition Act㽶Ƶֱs 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㽶Ƶֱs 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 2018.

In November 2023, the bureau announced an $825,000 fine against ticket reseller Ticket Nation 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.

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

㽶ƵֱConsumers expect to pay the advertised price. We㽶Ƶֱre taking action against Cineplex because misleading tactics like drip pricing only serve to deceive and harm consumers,㽶Ƶֱ Boswell said in a news release at the time.

㽶ƵֱFor years, we have urged businesses, including ticket vendors, to display the full price of their products upfront.㽶Ƶֱ

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

Advertising a lower price before adding the charge is 㽶Ƶֱfalse and misleading㽶Ƶֱ 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.

Another proposed class action, also filed last month in Vancouver, alleges Omio wrongfully advertises lower prices before adding a 㽶Ƶֱservice fee㽶Ƶֱ to final prices.

It cites an example of a plane ticket from Vancouver to Toronto advertised initially on Omio㽶Ƶֱs website for $281, before applying the service fee that boosts the cost to $300.75.

Canada Post, Omio and Bloomex did not respond to requests for comment on the lawsuits. The lead plaintiff in the Canada Post case declined to comment, and their lawyer did not respond to requests for comment.

Canada㽶Ƶֱs Competition Bureau declined an interview request.

More changes to the Competition Act are winding their way through parliament, and Turner said they will allow consumers to seek damages from companies that abuse their 㽶Ƶֱmarket dominance㽶Ƶֱ and firms that make fake claims of environmental benefits of their products or services, known as 㽶Ƶֱgreenwashing.㽶Ƶֱ

He said public officials can㽶Ƶֱt necessarily prosecute every case due to limited resources, but the competition law changes allow private law firms and consumers to go after companies directly.

㽶ƵֱWhere you㽶Ƶֱre a small consumer, you lose $1.50 or three bucks or whatever, some small amount up against a mega corporation, how do you enforce that?㽶Ƶֱ he said. 㽶ƵֱClass actions come in and they incentivize lawyers 㽶Ƶֱ to gather together a bunch of people who have a small loss, jumble them into one group and start a lawsuit. Now, all of a sudden, the economics work.㽶Ƶֱ

㽶ƵֱYou㽶Ƶֱre the victim. You can get your buck fifty, whereas before you could not.㽶Ƶֱ





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