Competition Bureau Supports International Guidelines for Increased Co-operation Against Cross-border Fraud and Deceptive Commercial Practices

OTTAWA, June 17, 2003 — The Competition Bureau is pleased to announce its participation in the adoption of international guidelines for co-operation in the fight against cross-border fraudulent and deceptive commercial practices.

The Guidelines for Protecting Consumers from Fraudulent and Deceptive Commercial Practices Across Borders were prepared by the Committee on Consumer Policy of the Organisation for Economic Co-Operation and Development. The Competition Bureau along with the Office of Consumer Affairs represent Canada on the committee.

"The implementation of these Guidelines is key to stopping consumer scams which target the most vulnerable and result in billions of dollars in losses," said Raymond Pierce, Deputy Commissioner of Competition. "Historically, these types of cases could be dealt with by national law enforcement authorities but increasingly sophisticated fraudsters have made it a necessity to combine our forces."

For example, this past October, the Bureau was able to lay charges against a company operating as First Capital Consumers Group thanks to the assistance of the U.S. Federal Trade Commission (FTC) and others in the Toronto Strategic Partnership. First Capital allegedly defrauded close to 100,000 American consumers and grossed approximately $20 million (U.S.) in the last year.

"The Guidelines were developed in an effort to combat the growing problem of cross-border scams and are particularly important to Canada and the Competition Bureau as we work to assure Canada is not branded as a safe haven for scam artists," said Mr. Pierce.

Statistics compiled from Consumer Sentinel, an international call centre maintained by the FTC, reported over 30,000 cross-border fraud complaints in 2002. While 2,700 were from Canadian consumers, 14,000 were from U.S. consumers who were scammed by Canadian companies.

The Competition Bureau's own statistics also demonstrate the gravity of cross-border scams. In the past year alone, the Competition Bureau has laid about 1,000 charges under the Competition Act and Criminal Code against individuals and companies involved in illegal scams. Furthermore, in this year's first quarter, 47% of all complaints received by the Bureau were from other countries, in particular the United States, the United Kingdom, Australia and France.

The Competition Bureau also participates in ICPEN, the International Consumer Protection and Enforcement Network. ICPEN is a key partnership for the Bureau in its efforts to fighting deceptive telemarketing, mail and Internet scams, which are increasingly cross-border in nature. ICPEN is focused on finding ways for agencies to cooperate and deal more effectively with this growing problem. As such, the Bureau will collaborate with members of ICPEN in the implementation of these Guidelines.

For years cross-border scamsters have benefited from national boundaries in order to evade law enforcement authorities. These Guidelines provide a list of recommendations to be implemented by member countries which include broad principles for international cooperation as well as specific provisions covering notification, information sharing, and assistance with investigations. They also cover issues regarding the authority of law enforcement agencies, invite private-sector co-operation and set the stage for future work on consumer redress.

While the initiative in Canada will be led by the Competition Bureau and the Office of Consumer Affairs, the Guidelines will be carried out in collaboration with provincial and territorial governments.

"We will be implementing these Guidelines in Canada and look forward to working with our counterparts around the world to combat these scams," stated Mr. Pierce.

The full text of the Guidelines can be found at http://www.oecd.org/sti/crossborderfraud.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

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