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“Telefunding” Schemes.

Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “These prey on the charity of victims, soliciting donations for worthy causes, such as antidrug programs or victims of natural disasters. The pitch may simply ask for donations, or it may include other inducements, such as donor eligibility for valuable prizes which never materialize.  Charitable donors do not usually expect something in return for their contribution, and may thus never become aware that they have been defrauded.”

Telemarketer.

CRTC, National Do Not Call List: “If you make telemarketing calls or send telemarketing faxes on your own behalf or on behalf of one or more other businesses (i.e. clients), then you are a telemarketer.”

Telemarketing.

Competition Act, section 52.1:  “’telemarketing’ means the practice of using interactive telephone communications for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest.”

Competition Bureau, Enforcement Guidelines, Telemarketing – Section 52.1 of the Competition Act: “’Interactive telephone conversations’ will be interpreted as live voice communications between two or more persons.  The Bureau will not consider ‘interactive telephone communications’ to have occurred with regard to: fax communications; Internet communications; or a customer’s interaction with automated prerecorded messages.”

CRTC, National Do Not Call List: “Telemarketing is the use of telecommunications facilities to make telephone calls or send faxes to consumers for the purpose of solicitation. Solicitation covers a wide range of activities, including sales calls, prospecting calls, and calls for charitable donations or volunteers. Any organization has the potential to be a telemarketer.”

Testimonial.

Competition Bureau, Misleading Advertising and Labelling: “The Competition Act prohibits the unauthorized use of tests and testimonials, or the distortion of authorized tests and testimonials.  The provision also prohibits a person from allowing such representations to be made to the public.”

Tort of deceit / fraudulent misrepresentation

XY, Inc. v. International Newtech Development Incorporated, 2012 BCSC 319 (CanLII): “The tort of deceit, also known as civil fraud, is concerned with the intentional inducement of another person to rely upon a representation that the representor knows to be untrue.  The elements that make up this tort are: (1) a false representation of fact by the defendant; (2) made with the knowledge of its falsity or recklessly, i.e., not caring whether it is true or not; (3) made with the intention that the plaintiff would act on it; (4) with the intention that the plaintiff would act on it; and (5) the plaintiff suffered damages.”

Derry v. Peek (1889) 14 App. Cas. 337 (H.L.) [Combining the fourth and fifth elements]: “(1) A false representation or statement made by the defendant; (2) the statement was knowingly false; (3) the statement was made with the intention to deceive the plaintiff; and (4) the statement materially induced the plaintiff to act, resulting in damage.”

Spencer Bower, Turner and Handley, Actionable Misrepresentation (4th ed., 2000): “An action for damages for fraudulent misrepresentation at common law was an action for deceit.  The Court of Chancery exercised a concurrent jurisdiction with the Courts of Law in cases of actual fraud, and could award equitable compensation on similar, but not identical, principles, and also specific relief.  In either case a representee must allege and prove: (1) a representation; (2) that the defendant was the representor; (3) that the plaintiff was a representee; (4) inducement; (5) falsity; (6) alteration of position; (7) fraud; (8) damage.  The first six matters are common to all claims for misrepresentation … The seventh and eighth, fraud and damage, are peculiar to actions in deceit.  From the earliest times it has been recognized that the concurrence of fraud and damage is essential to a claim for damages for fraudulent misrepresentation.”

Trade-mark.

Intellectual Property Institute of Canada (IPIC): “A trade-mark is a word, design, number, two-dimensional or three-dimensional form, sound or color, or a combination of two or more of these elements which a trader uses to distinguish his/her products or services from those of his/her competitors and serves to establish goodwill with the consumer.  Almost every kind of company that operates a business uses a trade-mark of one kind or another to identify its products or services.   The difference between a trade-mark and a trade name is that the first is used with specific products or services coming from a single source, the trader, while the second identifies a company and its business as a whole.  Words can be used interchangeably as both a trade-mark and a trade name.  Use as a trade-mark will depend on the context of its use.”

Trading stamps.

Sections 379 and 427 of the federal Criminal Code prohibits certain trading stamp promotions.  Section 379 of the Criminal Code defines “trading stamps” to include:  “… any form of cash receipt, receipt, coupon, premium ticket or other device, designed or intended to be given to the purchaser of goods by the vendor thereof or on his behalf, and to represent a discount on the price of the goods or a premium to the purchaser thereof (a) that may be redeemed (i) by any person other than the vendor, the person from whom the vendor purchased the goods or the manufacturer of the goods, (ii) by the vendor, the person from whom the vendor purchased the goods or the manufacturer of the goods in cash or in goods that are not his property in whole or in part, or (iii) by the vendor elsewhere than in the premises where the goods are purchased, or (b) that does not show on its face the place where it is delivered and the merchantable value thereof, [or] (c) that may not be redeemed on demand at any time, but an offer, endorsed by the manufacturer on a wrapper or container in which goods are sold, of a premium or reward for the return of that wrapper or container to the manufacturer is not a trading stamp.”

Section 427 of the Criminal Code sets out the substantive offence as follows:  “Every one who, by himself or his employee or agent, directly or indirectly issues, gives, sells or otherwise disposes of, or offers to issue, give, sell or otherwise dispose of trading stamps to a merchant or dealer in goods for use in his business is guilty of an offence punishable on summary conviction.  (2) Every on e who, being a merchant or dealer in goods, by himself or his employee or agent, directly or indirectly gives or in any way disposes of, or offers to give or in any way dispose of, trading stamps to a person who purchases goods from him is guilty of an offence punishable on summary conviction.”

Travel-Related Schemes.

Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Fraudulent telemarketers purporting to be travel agencies offer substantial travel packages at comparatively low cost. The use of travel as a commodity makes the long-distance nature of the transaction plausible. The fraud usually involves lies, misrepresentations, or non-disclosure of information about the true value of travel and accommodations, limitations or restrictions on when or where purchasers may go, or what awaits them at the destination. In some cases, the travel proves to be a complete fabrication or has so many terms and conditions as to be completely unusable.”

Twisted text prize.

Consumer Protection BC, “Top Ten Scams 2013 – Just in case a scam is around the corner”: “You receive a text message.  When you open it, you are surprised by a message informing you that you’ve won a major retailer’s gift card.  You just need to go to a website and enter a PIN, and the card is yours.  You are asked to enter the PIN and an email address.  Then, you are taken to a form and instructed to fill out your name, cell number, mailing address and answer unrelated personal questions, such as ‘Are you interested in going back to school?’ and ‘Are you diabetic?’ When you reach the page to ‘claim your gift card,’ you instead find yourself directed to another site to apply for a credit card.  In the end, you never receive a credit card and you have given out personal information.”

For more information about Canadian contest/sweepstakes law, see: Contests, Contests and CASL, Contest FAQs, Contest Tips and Contests and Social Media.

For information about the Canadian contest/sweepstakes precedents (template rules) and checklists that we offer for sale, see: Canadian Contest Forms/Precedents.

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