Competition Bureau Takes Action Against Avis, Budget

The Competition Bureau of Canada said yesterday (March 11, 2015) that it is taking 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.

In an application filed with the Competition Tribunal, the Bureau said it is 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, the Bureau said that these fees are characterized as taxes, surcharges and fees that governments and agencies require Avis and Budget to collect from consumers. In fact, it found that 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.

According to the Bureau, the additional fees imposed by Avis and Budget can increase the cost of a rental by up to approximately 35%, depending on the rental location and type of vehicle. And it said that Avis and Budget have collected more than $35 million in fees and surcharges from consumers since March 12, 2009.

Yesterday’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.

John Pecman, Commissioner of Competition, commented: “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.”

To view the Bureau’s application, click here.