Hertz and Dollar Thrifty to pay $1.25 million penalty for advertising unattainable prices and discounts
Two more car rental companies will change their advertising
April 24, 2017, Ottawa, Ontario, Competition Bureau
The Competition Bureau has reached a consent agreement with Hertz Canada Limited (Hertz) and Dollar Thrifty Automotive Group Canada Inc. (Dollar Thrifty) where both companies will pay a total of $1.25 million in administrative monetary penalties, ensure their advertising complies with the law and implement new procedures aimed at preventing advertising issues in the future.
The consent agreement is the result of an investigation where the Bureau concluded that Hertz and Dollar Thrifty were advertising enticing low prices to attract consumers. However, those low prices were unattainable because mandatory fees were systematically added to those prices. The Bureau concluded that the companies’ price representations were misleading, and it was not sufficient for the companies to provide an estimate of the total price before consumers completed their reservation.
The additional mandatory fees could increase consumers’ final price by as much as 10% to 57%. The Bureau concluded that some of these fees were described in a way that implied that they were mandatory taxes or surcharges imposed by various governments when, in fact, Hertz and Dollar Thrifty chose to impose the additional mandatory fees to recover part of their own cost of doing business. The companies will revise the description of their fees to ensure the descriptions are not misleading.
The Bureau also concluded that Hertz and Dollar Thrifty advertised discounts that led consumers to believe that they would get a percentage off of their total bill. In fact, the discount was not applied to the total bill and the additional mandatory fees still had to be paid in full.
The prices and discounts were advertised across various media, including on the companies’ websites, on mobile applications and by email.
"Enhancing Canadians’ trust in the digital economy is a priority for the Bureau. Today’s resolution will address any remaining issues in Hertz and Dollar Thrifty’s advertising, including online. The two companies proactively and voluntarily took steps to address the conduct and will make further changes to ensure consumers are provided with accurate information."
Commissioner of Competition
The agreement, which is registered with the Competition Tribunal and is legally binding, resolves the Commissioner’s concerns; as such no further legal proceeding is required at this time.
The Administrative Monetary Penalty is paid to the Receiver General of Canada and becomes part of the government’s general revenues.
Hertz and Dollar Thrifty have also agreed to provide the Bureau with proof that they have implemented a corporate compliance program to improve their procedures going forward.
Both companies are owned by the same parent company, Hertz Global Holdings Inc.
In June 2016, Avis and Budget paid $3 million in penalty to resolve similar concerns over unattainable prices due to additional mandatory fees. They also paid $250,000 towards the Bureau’s investigative costs.
The Bureau will continue to examine similar conduct in the car rental market and will take appropriate action as necessary.
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