Québec dealers settle in class action lawsuits

A settlement has been reached years after a Montréal law firm launched several class action lawsuits against approximately 220 car dealerships in Québec over what they described as deceptive pricing practices.

The settlement involved 150 of the dealerships in question and was approved by the Superior Court of Québec on Oct. 8, 2024, according to the firm’s website and a court document.

In an email response to Canadian auto dealer, Benjamin W. Polifort, an attorney for Lambert Avocats, the firm that launched the lawsuits, said: “It is notable to denounce these practices and in the interest of these consumers that the four class actions were filed between 2021 and 2022.”

Based on the Automobile Protection Association, new and used car dealerships were accused of increasing their advertised prices by as much as $300 to over $1,000 at delivery.

The court judgment accused them of violating the Consumer Protection Act, in that “certain prices announced by them to consumers did not include certain fees, or that certain goods and services were imposed on consumers when purchasing or leasing a motor vehicle.”

Examples include charging a higher price for the vehicle than advertised, charging for something the consumer did not request, and/or providing a false or misleading representation to the consumer via an incomplete price that did not include additional costs imposed on the sale of the vehicle.

The end result is that the dealerships involved in the settlement must comply with certain sections of the Consumer Protection Act, in terms of setting their purchase and lease prices for the vehicles they sell. They will also have to pay the costs of administering the settlement and the fees and disbursements of Class Counsel (lawyer fees).

Furthermore, consumers who bought or leased a new or used vehicle from one of the dealerships will receive a credit as part of the settlement.

“Under this agreement, all consumers who purchased or leased a new or used vehicle during the period in question will be able to obtain a $75 credit from their dealer, applicable to the purchase of accessories (such as windshield washer fluid, floor mats, phone holders, etc.), maintenance, or any other good or service offered by the dealer,” said Polifort.

Ian P. Sam Yue Chi, President and CEO of the Corporation des concessionnaires d’automobiles du Québec (CCAQ), told Canadian auto dealer it was good news that there was an amicable settlement in the case. “It’s a complex case where a multitude of Québec dealers based on a multitude of practices and fees were sued in a single procedure.”

“What I see, and I don’t want to qualify the resolution or the procedure . . . but from what I understand of the situation is that we created a resolution that is a ‘one-size-fits-all,’ while the reality of the different dealers targeted could be very, very different from one dealer to another.”

“That’s why I think that (the resolution), in a situation like this, was the best possible outcome of the dispute for the benefit of both consumers and dealers,” said Sam Yue Chi.

Looking forward, he said they are still hearing that consumers in the province  want more transparency in terms of prices.

Sam Yue Chi said the CCAQ is on a mission to evolve their business models towards greater transparency as well.

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