Bell Canada busted for misleading advertising
Bell Canada is faced with a $10 million fine for advertising low prices without including the cost of mandatory additional fees.
Bell Canada to pay $10 million fine for misleading ads, Competition Bureau says
Bell Canada must pay a $10 million fine for using misleading advertising -- including "100 lines of fine print'' -- on prices for its home phone, Internet, satellite TV and wireless services, the federal Competition Bureau ruled.
The federal watchdog said Tuesday that Bell's advertised prices were not available because of additional mandatory fees related to modem rentals, phone and digital television services that were hidden from consumers in "fine print disclaimers.''
"If you're going to advertise the price, it had better be the real price,'' said Melanie Aitken, Commissioner of Competition.
"You can't use a disclaimer to advertise prices that aren't available to anyone. In this case, consumers had to wade through 1,600 words -- 100 lines of fine print -- just to try to sort out, if they could, what the real price was,'' Aitken said in an interview.
Aitken said Bell had been using this kind of misleading advertising nationally since 2007 in printed material, on its website and in some television and radio spots.
The fine is the maximum amount allowed under the Competition Act. Bell (TSX:BCE) has agreed to change its offending advertising within 60 days.
"This is the first case where that level of penalty has been agreed to,'' she said.
The bureau said Bell had advertised a bundle for home phone, Internet and television services starting as low as $69.90 per month. However, the lowest possible price, including the mandatory fees, was $80.27, the competition bureau said.
Aitken said Bell also offered a home phone service for $14.95 a month, but the actual price was about 20 per cent higher when the mandatory fees were included.
A Bell spokesman said the telecom company disagrees with the decision but agreed to resolve the issue rather than going through a lengthy and costly legal challenge.
"Disclaimers in advertising have been common practice in the communications marketplace and many other industries in Canada,'' said Mark Langton.
"The bureau has examined our advertising in the past and never raised concerns about price disclaimers,'' he said in an email.
"We've always disclosed all fees in our advertising. The bureau uses a bell.ca example to explain its position, but customers could not actually buy our products without seeing any and all fees that would apply.''
Aitken said she hopes the message that it's not acceptable to use fine print to explain prices goes beyond the telecom industry to businesses in general.
"Something as important as the total price that you're going to offer, it had better be clear.''
The $10 million will go into a general government fund and Bell is paying an additional $100,000 to the Competition Bureau to cover the costs of the investigation, Aitken said.