When you buy goods or products that did not meet your expectations based on how they were marketed or advertised, the main question that would cross your mind is “What can I do about it?”. This is where false advertising law in Canada comes in by providing with you with rights and remedies that you can use.
What are false advertising laws in Canada?
False and misleading advertising practices have been made illegal in Canada through the various false advertising laws.
At the federal level, false advertising law in Canada is mainly governed by the Competition Act; there are, however, other laws on advertising. Each province or territory has its own Consumer Protection Legislations, which may have some slight variations in their names.
To standardize how companies and marketers should advertise goods and products, Advertising Standards Canada (Ad Standards), a not-for-profit, self-regulating organization, maintains the Canadian Code of Advertising Standards. It serves as a code of ethics for advertising in Canada.
Here’s a great summary of how advertising self-regulatory organizations like @advertisingEASA (and us!), help protect consumers from irresponsible advertising. https://t.co/7HpxTj2qGe #adstandards #trustinadvertising
— Ad Standards (@AdStandardsCan) June 3, 2022
Competition Act
The Competition Act of Canada mainly prohibits monopolies, cartels, and conspiracies among corporations and businesses by regulating mergers, acquisitions, and commercial trade practices. It aims to maintain a Canadian economy that encourages small and medium businesses by levelling the competition in the market.
In connection with the regulation of commercial trade practices is the prohibition of false or misleading representations and marketing practices by the Act.
Under Canadian laws on advertising, materially false and misleading marketing strategies or advertising practices may be committed in various ways:
False or Misleading Representations (section 52 (1), Competition Act)
False or misleading representations are the direct or indirect promotion of a product (e.g., its supply, uses, effectiveness, or other product claims) or any business interest through false or misleading misrepresentations. It may also be committed either knowingly or recklessly.
Deceptive Telemarketing (section 52.1, Competition Act)
Telemarketing becomes deceptive under false advertising law in Canada –
- when false or misleading representations are communicated through any means of telecommunication; or
- where the conduct or the prize of a contest, lottery, or any other game of chance is conditioned upon the prospective buyer’s prior payment; or
- when there is no adequate and fair disclosure regarding a contest, lottery, or any other game of chance’s true value of its prizes; or
- when a product is offered at no cost or at an unreasonably cheaper price and when there is no disclosure regarding its normal price (fair market value) and other applicable restrictions, terms, or conditions; or
- when a product is offered at an excessively high cost and when its delivery is conditioned upon the prospective buyer’s prior payment.
Watch this video for an example of false lotteries or contests through deceptive telemarketing:
To learn more about false advertising, speak with a lawyer in your area. If you live in Montreal, for example, contact one of these advertising and marketing law experts in Québec.
Double Ticketing (section 54 (1), Competition Act)
Double ticketing is a violation of the false advertising law in Canada when, between two prices offered by a seller on its product or service, you are charged the higher price. These two prices may be found either in the product itself, on its wrapper or packaging, on a promotional display inside a store, or in any other form of advertisement.
Scheme of Pyramid Selling (section 55.1 (1), Competition Act)
Pyramid selling is a violation against the false advertising law in Canada because it clearly deceives the public or its participants through its too-good-to-be-true benefits. Pyramid selling happens when:
- your participation in a plan is based on your prior payment or purchase of products; or
- your compensation or income from the plan is based on your prior payment; or
- when you’re supplied with products that must be sold at an unreasonable price, without a buy-back guarantee or a right to return the products when unsold, which is a usual practice in these types of sale transactions.
Bait and Switch Selling (section 74.04 (2), Competition Act)
Bait and switch selling happens when you are offered a product at a bargain price, but later the seller persuades you to buy another product because of an alleged shortage of the cheaper item.
Consumer Protection Legislations
The following are the laws of each province or territory that form part of the false advertising law in Canada:
- Consumer Protection Act: Ontario, Saskatchewan, Manitoba, Québec, Nova Scotia, Prince Edward Island, Northwest Territories, Nunavut, and Yukon
- Business Practices and Consumer Protection Act: British Columbia
- Fair Trading Act: Alberta
- Consumer Product Warranty and Liability Act: New Brunswick
- Consumer Protection and Business Practices Act: Newfoundland and Labrador
These laws protect your rights as consumers, punish false advertising, and prohibit certain unfair commercial practices among businesses, retailers, and marketing companies.
Canadian Code of Advertising Standards
Initially released in 1963, the Canadian Code of Advertising Standards set the guidelines for producers, marketers or advertisers. As part of false advertising law in Canada, the Code’s 14 Provisions are the basis for reviewing private complaints and in resolving disputes among advertising companies.
How do I report misleading advertising in Canada?
If you think that you have been a victim of false advertising or when there has been a violation against any of the false advertising laws in Canada, you can contact the proper government agencies.
For misleading advertising of goods and products: contact the Competition Bureau through its online complaint form. It will ask for your personal details and other relevant evidence proving the alleged misleading advertising.
For false labelling or false advertising for food products: you can file a complaint with the Canadian Food Inspection Agency through its online form for food complaint and concerns.
Find out what happens after a health and safety inspection here.
You can file a complaint online with Ad Standards if the violation stems from the Canadian Code of Advertising Standards.
You may also pursue a civil or criminal action against a business or marketing company which has caused you damage under the any of the false advertising laws in Canada. Consult with a Lexpert-ranked advertising and marketing lawyer to know how to file a case against these violators.
Know more about false advertising law in Canada by posting your questions in the comment section below.
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