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WHAT IS MISLEADING ADVERTISEMENT?

Have you ever come across an alluring ad only to learn that what is actually offered by the seller isn’t what was advertised? If you have, there is a possibility that the ad in question did not comply with Canadian legislation.

In Canada, the primary legislation regulating advertising and marketing is the federal Competition Act. This statue prohibits the use of misleading advertising in order to promote a product or business interest.

In addition to the federal Competition Act, consumer protection also exists at the provincial level. For example, in Ontario false, misleading, or deceptive advertising is defined under the Consumer Protection Act. Some examples include when an individual or business states:

  • A product or service has sponsorship or approval it does not
  • Goods or services are of a particular standard or quality when it is not
  • A specific price advantage is available when it is not

HOW TO LODGE A COMPLAINT

(1) Competition Bureau

If a consumer suspects that an ad may be false or misleading, the consumer may contact the Competition Bureau, which is an independent law enforcement agency that administers the Competition Act.

Consumers may file a complaint to the Competition Bureau by filling out a form online. The information will then be reviewed in order to determine whether a formal inquiry is warranted. In such an event, an individual or business could face civil or criminal charges.

Under the civil route, the court may order an individual or business to stop the ad, issue a notice, or pay a monetary penalty.  For example, in 2011 Bell Canada was determined by the Competition Bureau to have engaged in misleading advertising practices. Bell Canada was required to pay a penalty of ten million dollars, which is the maximum amount for a first-time violation allowed under the Competition Act.

Generally, the Competition Bureau will proceed on the civil route unless certain criteria can be satisfied. This criteria includes having evidence suggesting that the misleading statement was made intentionally or recklessly, and demonstrating that a criminal prosecution would be in the public interest.

(2) Advertising Standards Canada

Besides the Competition Bureau, consumers can also file a complaint to Advertising Standards Canada (“ASC”). ASC is a national, non-profit organization that aims to protect consumers by maintaining the integrity of Canadian advertising. ASC administers the Canadian Code of Advertising Standards (“Code”), which includes 14 provisions that outline the expectations for acceptable advertising. The Code forms the basis for review for consumer complaints about advertising and applies to products and service advertisements in any medium (e.g. TV, radio, and internet).

Similarly, consumers suspecting Code violations may submit a complaint online. Complaints will be reviewed by an independent Council consisting of senior volunteers from the advertising industry and public. If the Council determines that an ad has violated the Code, requests to alter or end the ad will be submitted to the individual or business.

Therefore, one notable difference between the two complaint filing procedures lies in the available remedies. As a federal regulating body, the Competition Bureau is capable of delivering more severe punishments. In the event that advertisers fail to comply with the Council’s decision, however, ASC is nevertheless influential. ASC has the power to request the media’s support in no longer showing the ad in question. ASC may also choose to publicly identify the individual or business that made the false or misleading advertisement.

Consumers should also be aware that while the Code applies to products and services of any medium, the Code does not apply to the following:

  • Packing, wrappers, and labels
  • Political and election advertising
  • Media that originates outside Canada unless the advertiser is a Canadian person or entity

A POSSIBLE ALTERNATIVE: CIVIL FRAUD

One alternative to submitting a claim to regulatory bodies is to pursue a civil remedy and receive damages under the tort of civil fraud, also known as misrepresentation or deceit. The route of civil litigation, however, is a long and arduous one. Typically, these cases only qualify for small claims court, which ultimately reduces the compensation that can be claimed. Moreover, going down the route of civil litigation can be time consuming. This is especially true in circumstances where multiple individuals are similarly situated and the claim proceeds as a class action. It is recommended that individuals considering a civil claim for fraud seek legal advice.

A NOTE ON PROFESSIONAL ADVERTISING

The public should be aware that advertisements related to medical or legal services are regulated by professional societies or associations. In Ontario, health and legal services are overseen by the College of Physicians and Surgeons of Ontario and the Law Society of Ontario respectively. Consumers should therefore look to contact these organizations if an issue or concern related to professional advertising arises.

Generally, the professional marketing rules are focused on ensuring that advertisements are not false, inaccurate, misleading, or deceptive. For example, a lawyer may only advertise themselves as an expert in a certain area of law if certified by the Law Society. A lawyer who receives a referral fee must also disclose this information to the client. Similarly, physicians advertising medical procedures must disclose all the potential risks to a patient. Failure to do so would contradict the physician’s requirement to obtain informed consent.

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