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Section 76(1) of the Fair Trading Act (FTA) states every advertisement that offers credit and states the interest rate or amount of any payment must disclose the information provided by the Cost of Credit Disclosure Regulation.

Section 6 of the Cost of Credit Disclosure Regulation specifies the information that must be disclosed as required by Section 76(1) of the FTA.  

If an advertisement offers credit and states the interest or amount of any payment it must disclose the Annual Percentage Rate (APR) and term of that APR.

In addition to that information, if an advertisement for a credit sale that specifically identifies a product, the cash price of that specific product must be disclosed.  In addition, any non-interest charge or fee such as “document” or “administration fees” in connection with the credit offer, the fee must be disclosed as well as the total cost of credit, in other words, the amount of interest that will be charged over the term of the loan.

Where any information required to be disclosed would not be the same for all credit agreements to which the advertisement relates, the information must be for a representative transaction and must be disclosed as such.

An advertisement on radio, television or a billboard or other such media with similar time or space limitations is not required to disclose the total cost of credit but must still disclose the APR and term.

Section 76(2) of the FTA deals with advertisements of interest free periods and requires that every advertisement that states or implies that no interest is payable for a certain period of time must disclose the information prescribed in Section 7 of the Cost of Credit Disclosure Regulation.

Section 7 of the Cost of Credit Disclosure Regulation states that the advertisement must disclose that the transaction is unconditionally interest-free during the period or that interest accrues during the period but will be forgiven under certain conditions and in this case, the advertisement must also disclose the conditions and the APR for the period assuming the conditions are not met.

EXAMPLE – An advertisement indicates financing at 0.9% is being offered however the term of the financing is not disclosed as required is an offence pursuant to Section 6(2)(b) of the Cost of Credit Disclosure Regulation.

Section 92 of the FTA requires that an advertisement that gives any specific information about the cost of a lease must disclose the information prescribed Section 18 of the Cost of Credit Disclosure Regulation and is as follows:

	that the transaction is a lease and the term of the lease;
	any payments required at or before the beginning of the term and the amount, timing and number of the periodic payments;
	the amount of any other payments that the lessee will be required to make in the ordinary course of events, the annual percentage rate and charges for exceeding the kilometer allowance set out in the lease, if the kilometer allowance is less than 20,000 kilometers per year
	where the information required to be disclosed is not the same for all the leases referred to in the advertisement, the information must be for a representative transaction and must be disclosed as such.

an advertisement on radio, television, billboard or other media with similar time or space limitations that gives any specific information about the cost of a lease must disclose that the transaction is a lease, any payments required at or before the beginning of the term and the amount, timing and number of the periodic payments and it must include a toll-free telephone number or reference to a publication where a person can obtain information regarding the term and annual percentage rate.

EXAMPLE – An advertisement that includes an offer for a specific product, such as a 2000 Ford F150 for $364.00 per month and a 2000 Mustang for $269 per month and there is no clear disclosure that these product transactions are lease offers, as is required by Section 18 (1) (a) of the Cost of Credit Disclosure Regulation is an offence pursuant Section 92 of the FTA.

EXAMPLE – An advertisement that includes one or more vehicles that are advertised as lease transactions however, there is no clear cost of credit disclosure information as required by Section 18 (1) (b) through (g) of the Cost of Credit Disclosure Regulation is an offence pursuant to Section 92 of the FTA.

Advertisements must not include any unfair trading practices.  Section 8 of the FTA states that an unfair practice may occur before, during or after a consumer transaction, and is an unfair practice even if no consumer transaction is entered into or concluded, which includes advertisements.

The most common unfair practices are:

	Statements that might reasonably deceive or mislead a consumer - example; claims about the performance of a vehicle, fuel economy, bank forced liquidation, etc when those claims are not true
	Statements that use exaggeration, innuendo or ambiguity - example; claims of lowest prices, best selection and quality of goods, no reasonable offer refused, etc.
	Statements that goods or services are of a particular standard quality, grade, style or model if they are not
	Advertisements stating the price of any goods or services yet the total price of the goods or services is not given - example; advertising the base price of a vehicle when in fact the vehicle has a number of options that are included in the actual price of the vehicle
	Advertisements appearing in an objective form such as an editorial, documentary or scientific report when the primary purpose of the representations are to sell goods or services, without stating the representation is an advertisement or promotion
	Representation that goods or services are available in a particular quantity if they are not

Any statements, claims or representations that are made regarding the goods or services being advertised must be truthful, clear and concisely stated.  Claims such as “Canada’s #1 Dealer...”, “the largest selection...”, “guaranteed lowest prices...”, “Cars cost less...” or any statement similar in nature should only be used if the statement can be substantiated by fact.  In addition, advertisements should include substantiation of claims or an offer to provide the consumer with substantiation upon request.

Also statements used in advertisements that are misleading, untrue, exaggerate or are ambiguous as to the material fact.

Example - An advertisement that that states 10 vehicles are available at special sale price when in fact there are only 2, is an offence pursuant to Section 6 of the FTA.

Section 11 of the Automotive Business Regulation of the FTA states that advertisements must include, in a conspicuous manner, the name of the Licensee and that the Licensee is the holder of an automotive business license.  Acceptable standards are:

AMVIC LICENSED or AMVIC LICENSEE  or

The Fair Trading Act, Cost of Credit Disclosure Regulation and the Automotive Business Regulation are available at a nominal charge from the Queen’s Printer Book Stores in Calgary and Edmonton.