(Adds comment from Avis)
TORONTO, March 11 (Reuters) - Canada's competition watchdog said on Wednesday it will take action against what it says are deceptive marketing practices by rental car agencies Avis and Budget that can increase customers' costs by as much as 35 percent.
The Competition Bureau said it has filed an application with the Competition Tribunal to seek an end to what it alleges are false, or misleading, price representations by Avis and Budget.
The agency is also seeking a total of C$30 million ($23.5 million) in penalties from Avis and Budget, as well as their parent company, Avis Budget Group Inc, along with refunds for consumers.
In an emailed statement, Avis Budget Group said its marketing and advertising efforts are intended at all times to demonstrate transparency and honesty, including the manner in which it presents rates and services.
"We look forward to the opportunity to set forth these facts to the authorities at the appropriate time," the company said.
The bureau said its investigation found that Avis and Budget advertise prices for vehicle rentals and other products that are not attainable due to additional fees imposed during the rental process.
It said these fees are characterized as taxes, surcharges and fees that governments and agencies require Avis and Budget to collect from customers, but that Avis and Budget in fact impose the charges to recoup some of their own costs.
The bureau said that as a result consumers end up paying higher prices or receiving smaller discounts than advertised.
The regulator said the additional fees imposed by Avis and Budget can increase the cost of a rental by up to 35 percent, depending on the rental location and type of vehicle. It said Avis and Budget have collected more than C$35 million in such fees and surcharges from customers since March 12, 2009.
$1=$1.27 Canadian Reporting by Euan Rocha; Editing by Peter Galloway