Competition Bureau takes action against alleged false or misleading car rental advertising

March 11, 2015 — Ottawa, ON — Competition Bureau
The Competition Bureau has taken action against what it considers to be deceptive marketing practices by two of Canada’s largest rental car companies, Aviscar and Budgetcar, and their parent company, Avis Budget Group Inc.
The Bureau has filed an application with the Competition Tribunal seeking an end to alleged false or misleading price representations by Avis and Budget, a total of $30 million in administrative monetary penalties from the three companies, and refunds for consumers.

The Bureau’s investigation found that Avis and Budget advertise prices for vehicle rentals and other associated products that are not attainable due to additional fees imposed during the rental process. Furthermore, these fees are characterized as taxes, surcharges and fees that governments and agencies require Avis and Budget to collect from consumers. In fact, Avis and Budget impose these charges to recoup part of their own cost of doing business. As a result, consumers end up paying higher prices or receiving lower discounts than advertised.

Today’s action also marks the Bureau’s first proceedings under the new provisions of the Competition Act that came into force as part of Canada’s Anti-Spam Legislation (CASL) in July 2014, because Avis and Budget also use electronic messages to disseminate the alleged false or misleading representations.

Quick Facts
The additional fees imposed by Avis and Budget can increase the cost of a rental by up to approximately35 per cent, depending on the rental location and type of vehicle.
Avis and Budget have collected more than $35 million in fees and surcharges from consumers sinceMarch 12, 2009.

Quote
"Consumers are entitled to clear and precise information when making their purchasing decisions and need to be confident that the information they receive regarding additional fees is truthful and accurate."
John Pecman, Commissioner of Competition

Related Information
The Notice of Application will be available on the Competition Tribunal website shortly.

Contacts
For media enquiries, please contact:
Media Relations
Telephone: 819‑994‑5945
Email: ic.media‑cb‑bc.ic@canada.ca
For general enquiries, please contact:
Information Centre
Competition Bureau
Telephone: 819‑997‑4282
Toll free: 1‑800‑348‑5358
TTY (hearing impaired): 1‑800‑642‑3844
www.competitionbureau.gc.ca
Enquiries/Complaints

Stay connected
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.


PART 2
Avis and Budget to pay a $3 million penalty to resolve concerns over unattainable prices

June 2, 2016, OTTAWA, Ontario, Competition Bureau
As part of an agreement reached with the Competition Bureau, Aviscar Inc. (Avis) and Budgetcar Inc. / Budgetauto Inc. (Budget) will pay a $3 million administrative monetary penalty for what the Bureau concluded was false or misleading advertising for prices and discounts on car rentals and associated products. They will also be paying $250,000 towards the Bureau’s investigative costs and will be required to implement a corporate compliance program.
A Bureau investigation concluded that certain prices and discounts initially advertised by the two companies were not attainable because consumers were charged additional mandatory fees that were only disclosed later when making a reservation. The prices were advertised on Avis and Budget’s websites, mobile applications and in emails, as well as in certain newspaper advertisements, television commercial and flyers. The Bureau concluded that the representations were misleading even though an estimate of the fees was disclosed before consumers completed their reservation. The mandatory fees could increase the cost of a car rental by 5% to 20% above the original advertised price, depending on the rental location and vehicle type.
To address the Bureau’s concerns, Avis and Budget will not advertise car rentals and associated products at prices that are not attainable due to additional mandatory fees. Furthermore, the companies will revise the description of the additional fees to ensure they do not give the misleading impression that governments and agencies require them.
The consent agreement reached today resolves the Bureau’s concerns and sends a clear message to the marketplace that these types of business practices will not be tolerated.

Quick facts
The Bureau filed an application with the Competition Tribunal in March 2015 seeking to put an end to what it alleged was false or misleading advertising by Avis and Budget. In July of the same year, the two companies proactively and voluntarily made changes to a number of their advertising materials, resolving some of the Bureau's concerns.

Certain mandatory fees charged by Avis and Budget to consumers were described as taxes and surcharges and were applied systematically when renting a car and other associated products, such as a GPS. The Bureau concluded that Avis and Budget used the additional revenue to recover part of their own cost of doing business.

This agreement also addresses the concerns raised by the conduct under the new provisions of the Competition Act that came into force when Canada's Anti‑Spam Legislation was adopted. As such, the agreement applies to all representations regarding prices and discounts, including those distributed in electronic messages.

The Bureau will continue to examine similar issues in the car rental market and will take action as necessary.

Quote
"Prices advertised to consumers, including on digital platforms, must be accurate. I am confident that the Bureau’s investigation and settlement of this case will serve as an important deterrent to false or misleading advertising in the Canadian marketplace."
John Pecman,
Commissioner of Competition

Related link
March 11, 2015: The Competition Bureau takes action against alleged false or misleading car rental advertising

Contacts
For media enquiries, please contact:
Media Relations
Telephone: 819‑994‑5945
Email: ic.media‑cb‑bc.ic@canada.ca
For general enquiries, please contact:
Information Centre
Competition Bureau
Telephone: 819‑997‑4282
Toll free: 1‑800‑348‑5358
TTY (hearing impaired): 1‑800‑642‑3844
www.competitionbureau.gc.ca
Enquiries/Complaints

Stay connected
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

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