The credibility of collective actions in matters of consumption is already fragile. And it’s not the $75 credit supposed to be given to the 500,000 Quebecers forced to pay fees when purchasing their vehicle that improves things. Moreover, this amicably negotiated agreement will be contested, I learned. The Consumer Protection Office could also appear in court, which it has never done.
The law is clear: Quebec merchants cannot charge a price higher than that announced. They are therefore prohibited from adding, on an invoice, mandatory charges for this or that or other things.
However, over the years, car dealerships have shown impressive creativity in imposing all kinds of fees on their customers. For preparation, documentation, cash payment, administration and even a starter kit.
The average cost varied between $300 and $600, but could reach $1,695, as shown by the charges against Grenier Chevrolet Buick GMC, in Terrebonne. The company pleaded guilty a few days ago and paid a $12,000 fine.
This multitude of bogus fees has led to the filing of four requests for class actions targeting 220 used vehicle dealers and dealers. An amicable agreement was reached in March with 150 of these dealers: their customers will receive a credit of $75, if the court approves this “coupon settlement”.
A 100% utilization rate, which will never happen, would cost them around 35 million. Initially, the deal was valued at 500 million1.
It’s better than nothing, say all those who would never take the time to pursue small claims to recover their dues. But two consumer defense organizations see things differently.
The Association for the Protection of Motorists (APA) judges that this $75 coupon “looks like a disguised loyalty campaign.” Its president George Iny believes that the court should reject the agreement for several reasons, just like the Union des consommateurs. Both organizations hope to be able to tell the judge. They also asked the president of the Consumer Protection Office (OPC) Denis Marsolais to intervene, which the law allows him to do. If he does, it will be a first in the history of the OPC, I was confirmed. His decision has not yet been made.
Both the APA and the Consumers’ Union believe that the settlement negotiated by Lambert Avocats is not to the advantage of motorists and that it will have “a detrimental effect on the reputation and effectiveness of collective actions as consumer protection mechanism.
Among other criticisms: the coupons cannot be converted into cash, the value of unused coupons will remain in the pockets of the dealers and no one will control the distribution by merchants of these famous coupons.
We will therefore never know how many Quebecers used them and how much the dealers paid for the alleged fault.
One of the motorists who could obtain the $75 coupon, Hubert Lamontagne, expressed his opposition to the regulation. Poor credit is among his criticisms since a man obtained reimbursement of fees paid ($1,518) and punitive damages of $500 by suing for small claims.
“Class members should not suffer such a great disparity in results between asserting their rights without a lawyer in small claims ($2018) and being represented by a lawyer in a class action ($75),” writes Mr. Lamontagne, a lawyer who works for the APA. In addition, he judges that this regulation is “a great business opportunity” since dealers will have the potential to contact 500,000 people to encourage them to come on site.
Not to mention there’s not much you can do with $75 at a dealership other than buying windshield wipers and promotional merchandise like mugs, key chains, stuffed animals and caps. . Would you like to advertise to the merchant who overcharged you?
Of course, you can reduce your bill by changing your oil or tires, undoubtedly the two best options. The credit could also be used on the cost of a repair.
It will be interesting to hear the arguments in favor of the settlement which will be argued by the lawyer leading the case, Jimmy Ernst Jr. Laguë-Lambert. This “super nice agreement for the members” was “signed according to the rules of the art”, he told me.
“Voucher settlements” have long been criticized, particularly because compensation is conditional on a purchase from the company that may have broken the law and harmed its customers. It’s quite contradictory, when you think about it. Also, the utilization rate is very low, as low as 0.54% in a case occurring in the United States, mentioned a report2 supplemented with 101 pages from Option consommateurs on the issue.
Generally, judges approve the settlements agreed between the parties. But protests have already worked. It happened in 2022 in the Uber Eats affair because no consumer was compensated3.
My colleague Yves Boisvert has already criticized4 “the obscene industry of collective action”, because it fattens lawyers who tackle sometimes frivolous causes. Judges have also refused agreements by denouncing the indecent fees that firms had awarded themselves.
Obviously, some jurists push the envelope a little far. But in this case, the importance of the cause is undeniable and this is precisely why it requires a settlement that is both more consistent with the damage suffered by customers and more dissuasive, because the cost trend continues.
1. Read the article by Driving “Illegal charges: $75 credit if you purchased a vehicle from these dealers,” which provides a list of affected dealers
2. Consult the Option consommateurs study “Coupon regulations: is justice becoming a loyalty program? »
3. Read the article “Collective actions against Uber Eats: victory for UdeM students”
4. Read the column “The obscene industry of collective action”