The Ontario Superior Court has imposed a record CDN $15 million fine against Toronto-based company DataCom Marketing Inc., which operated a business directory scam targeting U.S. and Canadian businesses.
According to the Competition Bureau:
“Toronto-based DataCom contacted thousands of small and medium-sized businesses between 1994 and 2005, tricking businesses into believing that they had already ordered a business directory listing and using deceptive scripts and aggressive collection tactics. Victims lost hundreds of dollars each while the scam netted $12.9 million in profits.”
Canada’s new Commissioner of Competition said:
“We applaud the court’s decision … This is a clear signal to fraudulent telemarketers that their acts will be treated seriously by the courts. In turn, we, at the Bureau, will not hesitate to take action against fraudulent telemarketers when we uncover evidence that the law has been violated.”
According to the Bureau, DataCom’s founder and former president had been previously sentenced to two years in jail, three years probation and was subject to a ten year ban on telemarketing activities.
This most recent deceptive telemarketing case both highlights the potentially significant penalties under the federal Competition Act and that deceptive marketing remains a top enforcement priority for the Competition Bureau.
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- The general misleading advertising provisions of the Competition Act.
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- Multi-level marketing plans.
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- Telemarketing.
- Deceptive prize notices.
- Double ticketing & bait and switch advertising.
- Performance claims & comparative advertising.
- Scope of the recent Competition Act amendments.
- Consumer packaging and labeling legislation.
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