Although advertising campaigns which use flashy representations to grab consumers' attention might be effective, the Supreme Court of Canada ("SCC") recently ruled that they might also entitle those consumers to compensatory and punitive damages against the merchant. In Richard v. Time Inc., the plaintiff instituted an action against the defendants Time Inc. and Time Consumer Marketing Inc. after learning that the "Official Sweepstakes Notification" that he had received in the mail (and which had induced him to mail back the enclosed "Reply Coupon" in order to claim his anticipated winnings, thereby also subscribing to Time magazine for two years) was in fact only intended to be an invitation to participate in a sweepstakes, and not confirmation that he had already won the sweepstakes.
The advertisement had contained several exclamatory sentences in bold uppercase letters, whose purpose was to catch the reader's attention by suggesting that he or she had won a cash prize of USD $833,337. These representations were tempered by inconspicuous conditional clauses in smaller print, to the effect that entitlement to the prize was subject to the coupon being selected as the winning ticket.
Suffice it to say, the plaintiff did not have the winning ticket. The SCC agreed with the trial court's opinion that the advertising contravened Québec's Consumer Protection Act ("CPA"), since an average consumer who is "credulous and inexperienced and takes no more than ordinary care" when observing the general impression of the advertisement, would be misled by it. This involved analysing both the text of the advertisement, as well as its layout (i.e. the visual emphasis placed on certain representations, rendered misleading due to the small print used to convey the ambiguously-phrased conditions). In this case, the general impression imparted by the advertisement was that the consumer had already won the sweepstakes.
In coming to its decision, the SCC rejected the Court of Appeal's opinion that advertising should be assessed from the perspective of a consumer "with an average level of intelligence, scepticism and curiosity", since the purpose of the CPA is to protect unsophisticated and vulnerable consumers who do not necessarily exercise due diligence and prudence when digesting advertising.
The SCC ordered the defendants to pay $1,000 in compensatory damages, and $15,000 in punitive damages.
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