Advertising and Pricing Standards Flashcards

A Toronto travel agency advertises a flight-and-hotel package at $1,299 per person in a newspaper flyer. The fine print states the price is available for '2 seats only.' Under TICO advertising standards, which statement best describes the agency's obligation regarding seat availability disclosure?

Answer: The number of seats available at the advertised price must be disclosed clearly and conspicuously, and the agency must be able to demonstrate those seats existed at time of publication.

TICO requires that when a limited number of seats or units are available at an advertised price, that limitation must be disclosed clearly and conspicuously — not buried in fine print. Critically, the registrant must also be able to substantiate that the advertised seats actually existed at the time of publication. A generic 'subject to availability' clause does not satisfy this requirement, and TICO sets no fixed minimum seat count threshold.

A consumer books a cruise package in January for a July sailing. In April, the cruise line imposes a new fuel surcharge of $180 per person. Under the Ontario Travel Industry Act, 2002, when may the registrant pass this surcharge on to the consumer without triggering the consumer's right to cancel without penalty?

Answer: Only if the supplier contract explicitly permits surcharges and the consumer was informed at booking that prices are subject to supplier-imposed increases.

Under TICO's framework, a post-booking price increase (such as a fuel surcharge) may only be passed to the consumer if the possibility of such increases was clearly disclosed at the time of booking — typically via supplier tariff terms incorporated into the contract. If the consumer was NOT so informed at booking, the registrant cannot add the surcharge without giving the consumer the right to cancel penalty-free. Merely providing notice before departure (Option C) is insufficient if the disclosure condition at booking was not met.

A travel agency's website displays a vacation package with a crossed-out price of $2,500 beside a 'sale' price of $1,899. Under TICO and Ontario's Consumer Protection Act advertising rules, which condition must be met for this comparative pricing to be lawful?

Answer: The higher price must have been the agency's own regular selling price for an identical package offered in ordinary course of business for a reasonable period of time, and this must be substantiated if challenged.

Ontario's Consumer Protection Act prohibits misleading representations, and crossed-out comparative pricing is only lawful if the higher 'was' price reflects the registrant's own genuine, regular selling price offered in the ordinary course of business for a reasonable period. There is no fixed statutory period (e.g., 6 months or 90 days) prescribed — the standard is substantiability and reasonableness. Basing the comparison on a competitor's price (Option B) without disclosure is not permitted, and a mandatory 90-day display rule (Option D) does not exist in Ontario law.

A TICO-registered agency advertises a Caribbean all-inclusive package priced in U.S. dollars without stating the currency. A consumer books assuming Canadian dollars and disputes the charge. Which of the following correctly describes the agency's regulatory exposure?

Answer: The agency has violated TICO advertising standards, which require the currency of all advertised prices to be clearly identified; the consumer may be entitled to the CAD equivalent of the price quoted.

TICO advertising standards require that the currency of any advertised price be clearly and conspicuously stated. Failure to identify currency is a material misrepresentation. Where a consumer reasonably interprets an undisclosed price as Canadian dollars, the registrant may be required to honor the price at the CAD equivalent and faces potential TICO disciplinary action, including fines or conditions on registration. The 15% threshold (Option C) has no basis in TICO rules, and violations of advertising standards are expressly within TICO's enforcement mandate (contrary to Option D).

A travel agency advertises a 'Total Price: $1,650 per person' for a resort package. After booking, the consumer's invoice reveals an additional $95 'destination management fee' imposed by the resort, disclosed only in the supplier's terms and conditions hyperlinked from the agency's booking page. Under TICO standards, how should this fee have been handled?

Answer: The fee should have been included in the advertised total price, since it is a mandatory charge the consumer cannot avoid paying.

TICO's all-in pricing standard requires that the advertised 'total price' include ALL mandatory charges — including mandatory resort or destination management fees — that the consumer must pay. Burying such a fee in hyperlinked supplier terms does not satisfy the conspicuous disclosure standard. The key test is whether the charge is mandatory and unavoidable: if so, it must be part of the headline price. Only truly optional add-ons may be excluded from the advertised total.

Under TICO's advertising rules, a registrant runs a '72-hour flash sale' online. The sale ends without the website being updated, and consumers continue booking at the sale price for another 18 hours. Which of the following most accurately describes the registrant's obligations?

Answer: The registrant must honor all bookings made at the advertised price until the website is actually updated to reflect the price change, regardless of the intended expiry.

Under Ontario consumer protection principles applied by TICO, a price displayed on a registrant's website constitutes a representation to consumers browsing and booking. If the registrant fails to remove or update the advertised price when a promotion expires, consumers who book in good faith at the displayed price are entitled to that price — the registrant bears the operational responsibility for keeping its own advertising current. There is no statutory 'grace period' for digital ad updates (Option D), and placing the burden of knowledge on the consumer (Option C) contradicts TICO's consumer-protection mandate.