Leon’s, the Brick to donate $750,000 to charity over ‘buy now, pay later’ schemes

A customer walks through a Leon's store in Toronto on Monday November 12, 2012. Leon's Furniture announced that it is to purchase The Brick at an earlier news conference in the store. THE CANADIAN PRESS/Chris Young

OTTAWA – The Competition Bureau said Tuesday it has reached an agreement with Leon’s Furniture Ltd. and the Brick Ltd. regarding allegations of deceptive marketing practices dating back nearly five years ago.

As part of the settlement, Leon’s and the Brick have agreed to each donate $750,000 worth of home furnishings over two years to charities to be approved by the regulator.

The bureau alleged in July 2013 that the retailers’ “buy now, pay later” promotions, often resulted in customers paying more than advertised and should be stopped.

It said that 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 extra costs ranged from processing or administrative fees, delivery fees and taxes.

Story continues below advertisement

Leon’s, which owns the Brick, defended its deferred payment plans at the time. The retailer of furniture, appliances and electronics said they benefited consumers.

But as part of the agreement announced Tuesday, Leon’s and the Brick have also agreed to adhere to the bureau’s guidance on the proper use of disclaimers in advertising and the disclosure of fees associated with their financing plans.

Financial news and insights delivered to your email every Saturday.

“Consumers expect and deserve truth in advertising,” said Josephine Palumbo, the bureau’s deputy commissioner of competition, in a statement.

WATCH: Tips when shopping for furniture

Click to play video: 'Tips when shopping for furniture'
Tips when shopping for furniture

“The bureau works to ensure Canadians can trust advertising claims made by businesses and can be confident in their purchasing decisions. Increased competition in the marketplace provides consumers with competitive prices and more choice.”

Story continues below advertisement

Leon’s could not be immediately reached for comment about its settlement agreement with the Competition Bureau.

Sponsored content