Canadian Tire Faces Nearly $1.3 Million Penalty for False Advertising
Canadian retail giant Canadian Tire has been slapped with a fine just shy of $1.3 million after pleading guilty to breaching the Consumer Protection Act a total of 74 times through deceptive advertising practices.
According to Crown prosecutor Jérôme Dussault, Canadian Tire initially contested the charges but eventually opted for a settlement. “Their right to plead not guilty is respected. The legal process ensued, negotiations took place as is customary, and today, a settlement has been reached.”
The agreement was sanctioned by Judge Simon Lavoie of the Court of Quebec at the Montreal courthouse, with fines and costs ranging from $15,625 to $18,150 per violation, summing up to $1,287,550.
Investigation Reveals Misleading Pricing
The investigation, carried out by the Office of Consumer Protection (OPC) in 2021, highlighted that Canadian Tire had inflated reference prices in their marketing materials to give the false impression of significant discounts. OPC spokesperson Charles Tanguay emphasized that the advertised current prices did not reflect genuine discounts, thereby misleading consumers.
Data analysis showed that the products in question were rarely sold at the stated regular prices, either online or in-store, during the period under scrutiny.
Although originally three stores were part of the probe, they were eventually excluded from the case due to undisclosed reasons, as per the Consumer Protection Office.
Violation of Consumer Protection Act
The deceptive practice of showcasing inflated regular prices, which were non-existent, violates section 225(b) of the Consumer Protection Act, which prohibits merchants from misleading consumers with false pricing information.
Seven products were specifically targeted in the investigation, including Henckels and Cuisinart knife sets, Lagostina and Heritage cookware sets, and a Dewalt cordless drill. Canadian Tire has acknowledged guilt in relation to five of the products.
The retail giant is required to settle the fines within a year as per the terms of the agreement.
