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OTTAWA - The Competition Bureau has accused Leon's Furniture Ltd. (TSX:LNF) and The Brick Ltd. of "deceptive marketing practices."
The regulator alleged Tuesday that the retailers' "Buy Now, Pay Later" promotions, often resulted in customers paying more than advertised and should be ceased immediately.
The bureau said customers who chose the deferred-payment option often ended up paying more than those who paid for their purchases up front as a result of the additional fees, which were "buried" by the retailers in the "fine print."
The additional costs ranged from processing or administrative fees, delivery fees and taxes.
The allegations have not been proven in court.
In a motion filed in Ontario Superior Court, the Competition Bureau also wants Leon's and The Brick to refund all customers who paid any additional up-front fees or administrative penalties.
"Canadian consumers must receive clear and accurate information about what must be paid at the time of purchase, and what the actual cost of a particular item is if they use a deferred payment option," Competition Commissioner John Pecman said in a statement.
"Retailers cannot hide details of additional fees in lengthy disclaimers."
The retailer of furniture, appliances and electronics said it stands by its promotion programs.
"The deferred payment plans offered by Leon's and The Brick benefit consumers," Leon's said in a statement Tuesday.
"Leon's and The Brick deny the commissioner's allegations and will vigorously defend their position in the court."
Last March, Leon's acquired rival, The Brick.
Leon's has 76 stores with locations in every province except British Columbia, while The Brick has 230 stores operating under the banners, The Brick, United Furniture Warehouse, The Brick Mattress Store and Urban Brick banners.
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