On May 27, 2014, the Competition Bureau (the "Bureau") announced that an individual had been sentenced to 18 months in prison for his involvement in a deceptive telemarketing scheme that targeted businesses and not-for-profit organizations in both Canada and the United States.

The individual, the former co-owner of Corporation Oxford-Data Inc. and Sapphire Media Group, plead guilty to eight charges of misleading advertising and deceptive telemarketing under the Competition Act and one charge of possession of property obtained by crime under the Criminal Code. The same individual had previously been subject of a Bureau investigation in 2012 which led to charges being laid against him at that time.

The scheme consisted of telemarketing to businesses and not-for-profit organizations in Canada and the United States, seeking to renew business directory listings despite the fact that the organizations contacted had not previously placed a directory listing with the company. By falsely implying a pre-existing business relationship, the telemarketers deceived the organizations into paying for listings they had not ordered.  Deceptive telemarketing charges have been brought against several companies and individuals for similar types of directory listing/renewal schemes.

Deceptive telemarketing is prohibited under the criminal provision of the Competition Act. Specifically, it prohibits the making of materially false or misleading representations in promoting the supply of a product or a business interest during person-to-person telephone calls. Penalties include significant fines and imprisonment for up to 14 years.

This is the latest example of the Bureau's continued enforcement action in the area of deceptive telemarketing in recent years through its partnership with the Centre of Operations Linked to Telemarketing Fraud ("COLT"). COLT is comprised of Canadian and American enforcement agencies, including the Royal Mounted Police, the Canada Border Services Agency, the Department of Homeland Security, the U.S. Postal Inspection Service, the U.S. Federal Trade Commission and the U.S. Secret Service.

For a copy of the Bureau press release, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.