Over the past few years financial institutions and companies in other perceived “deep pocket” industries, like telecommunications, have become targets for class actions in regard to fees charged that are alleged to have not been adequately disclosed. Many of these claims have been grounded in breach of contract and/or breach of consumer protection legislation. Most of these claims have been certified.
We previously reported on this emerging trend in 2014. See previous blog post here: Undisclosed Fees Continue to Attract Class Actions
The trend continues.
In the recently released decision of Finkel v. Coast Capital Savings Credit Union, the British Columbia Supreme Court certified an action seeking damages from Coast Capital in relation to undisclosed foreign currency charges. The plaintiff alleges that Coast Capital charged undisclosed surcharges to its members who made foreign currency withdrawals from their personal Coast Capital accounts through ATMs on the Plus System or the Cirrus System outside of Canada. The plaintiff alleges that in so doing, Coast Capital breached its standard form personal account contracts, engaged in “deceptive acts or practices” contrary to the British Columbia Business Practices and Consumer Protection Act, and breached s. 52 of the federal Competition Act, which prohibits “knowingly or recklessly making a representation to the public that is false or misleading in a material respect”.
In its reasons, the court noted that despite the fact that s. 171 of the Business Practices and Consumer Protection Act requires a plaintiff to show that he or she suffered loss or damage “due to” a contravention of the Act in order to claim for damages under that section, a plaintiff need not prove reliance “[w]here the alleged contravention involves a wrongful overcharge contrary to a term of a contract”.
The court made this finding despite the fact that other courts had found reliance was required for damages under section 171 of the Act. Going against the grain, the court in Finkel held that whether reliance is required “depends on the nature of the alleged contravention”; in fee disclosure cases, the fact of the unauthorized overcharge causally links the breach to the plaintiff’s loss, thereby removing the requirement to show or plead reliance.
For undisclosed fee cases, the weight of authority remains in favour of certification, and, now, even lower pleading standards for damages claims under the Business Practices and Consumer Protection Act related to the claims of inadequate fee disclosure.