Competition Bureau cracks down on international directory scam

Melanie Aitken continues to strengthen her reputation as a no-nonsense commissioner of competition, today announcing plans to seek an injunction against several companies and individuals in response to a deceptive marketing scheme targeting companies across the globe.

“This scam has targeted thousands of businesses in Canada and around the world, forcing them to pay for a directory listing of little or no value,” said Aitken, a former Bennett Jones LLP partner.

“We are committed to cracking down on fraud that victimizes consumers and businesses. Significantly, the action we are taking today underscores the importance of working with our international partners to frustrate these types of multi-jurisdictional scams.”

The move follows an international investigation that allegedly exposed a business directory scheme that violated false or misleading and deceptive practices provisions within the Competition Act. The United States Federal Trade Commission is attempting to prosecute on the same set of facts in courts south of the border.

The scheme allegedly involved individuals and companies that faxed to organizations forms that included symbols similar to those trademarked by Yellow Media Inc.’s Yellow Pages Group. Businesses thought the forms were meant to update contact information for online listings. The fine print, however, included a notification that by signing the form the business was committing to a two-year contract at a cost of $1,428 per year.

Aside from the FTC’s Bureau of Consumer Protection, Aitken has also received support on the file from the National Fraud Intelligence Bureau and its counter-fraud partners in the United Kingdom.

Their actions follow a recent court action by the Australian Competition and Consumer Commission against two of the companies sued by Canada’s Competition Bureau — Yellow Page Marketing B.V. and Yellow Publishing Ltd. The Australian prosecution resulted in fines amounting to $2.7 million.

“It is essential to ensure scammers cannot use borders to evade detection and enforcement action,” said ACCC deputy chairman Peter Kell.

In an action filed before the Ontario Superior Court, the bureau requested more than $11.5 million in penalties and restitution for victims of the alleged Yellow scam.

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