Skip to content | Skip to institutional links

Common menu bar links

Court Decisions

Court Proceedings, Judgments and Court Orders — 2006

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

Information on downloading a PDF reader

Tom Taylor, Ravenshoe Services Ltd.

Date: 2006-12-13
Event: Sentencing
Court: Provincial Court of British Columbia
Court File Number: 138908-1
Parties: Tom Taylor, Ravenshoe Services Ltd.
Provision(s): s. 202, 206, 207 of the Criminal Code - Gaming and betting
Products: Unsolicited mailings of lottery promotions

Summary: In June 2004, charges (nine counts) were laid in the Provincial Court of British Columbia against Tom Taylor and Ravenshoe Services Ltd., under the gaming and betting provisions of the Criminal Code. These charges relate to direct mail lottery schemes that brought in approximately $47 million under the names Canadian Lottery Buyers Association, International Monetary Funding, International Lottery Commission and Transworld Lottery Commission. The lottery schemes were mailed to residents of the United States, the United Kingdom, Australia and New Zealand from 1995 to 2002.

On December 13, 2006 - following a joint submission by the accused and the Crown - Tom Taylor pled guilty to two counts and agreed to a $225,000 fine and other conditions. The court also imposed a probationary term of one year and 100 hours of community service, which includes speaking to seniors about the potential financial harm in responding to certain marketing material. While the corporate accused, Ravenshoe Services Ltd., was unable to pay a fine, the Court said that if the company had such an ability, a $775,000 fine would have been imposed.

Announcement:
2006-12-13 — Lottery Reseller Hit with Record Fine

(3098146)

Grafton-Fraser Inc.

Date: 2006-07-27
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT 2006-007
Parties: Grafton-Fraser Inc., Mr. Glenn A. Stonehouse
Provision(s): 74.01(2) and (3) of the Competition Act - Ordinary price: suppliers generally and Ordinary price: suppliers own
Products: Men's Clothing

Summary: A consent agreement between the Commissioner of Competition and Grafton-Fraser Inc., a national retailer of menswear products, and Glenn A. Stonehouse, President, Chief Executive Officer and majority shareholder of Grafton-Fraser, was filed with the Competition Tribunal wherein the Commissioner concluded that Grafton-Fraser Inc. and Glenn A. Stonehouse had engaged in reviewable conduct under the ordinary price provisions of the Competition Act between November 1, 1999 and September 2005.

The Commissioner concluded that, commencing in the Spring of 2005, Grafton-Fraser used a price representation (referred internally as the “Regular White Ticket Price”) preceded by the term “compare at” in making reference to the ordinary price offered by suppliers generally, when promoting products at a reduced price (referred internally as the “retail price”). The price represented by Grafton-Fraser as being the ordinary price offered by suppliers generally was fictitious, as Grafton-Fraser could not establish that: (1) a substantial volume of the products were sold by suppliers generally at or above the represented price within a reasonable period of time before the making of the representation; (2) the products were offered by suppliers generally at or above the represented price in good faith for a substantial period of time recently before the making of the representation; and (3) the “compare at” representation was added to the “Regular White Ticket Price” creating the general impression that the reference price refers to a general market price without appropriate market validation.

The Commissioner also concluded that Grafton-Fraser used a price representation (referred internally as the “Regular White Ticket Price”) in making reference to its own ordinary price, when promoting products at a reduced price (referred internally as the “retail price”). This “Regular White Ticket Price” was fictitious, in that: (1) in respect of certain products, Grafton-Fraser had not sold a substantial volume of the products at or above the represented price within a reasonable period of time before the making of the representation; (2) in respect of certain products, Grafton-Fraser did not offer the products at or above the represented price for a substantial period of time recently before the making of the representation; (3) the “Regular White Ticket Price” was used to create the general impression that this price is the price at which goods were ordinarily sold; and (4) the “Regular White Ticket Price” was used solely as a basis for exaggerating the savings claims to customers as “new arrivals” were immediately placed on sale.

Grafton-Fraser Inc. agreed to pay an administrative monetary penalty of $1,000,000 and a portion of the Bureau's costs of $200,000; ensure that all current and future regular price representations comply with the OSP provisions of the Competition Act ; implement and maintain a corporate compliance program; and post a corrective notice in its retail stores, on its Web site and in newspapers across Canada.

Announcement :
2006-07-27 - Grafton-Fraser pays $1.2 million to settle misleading advertising case with Competition Bureau

Court Documents :
Consent Agreement: The Commissioner of Competition v. Grafton-Fraser Inc. and Glenn A. Stonehouse (PDF; 161.42 KB; 21 pages)

(3069506)

Canadian Imperial Bank of Commerce

Date: 2006-06-14
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2006-005
Parties: Media Syndication Global, Havas S.A., Interactive Marketing Group ULC
Provisions: 74.01(1) and 74.01(2) of the Competition Act - False or misleading representations concerning the price at which a product would be ordinarily supplied.
Products: Bushnell Binoculars (8x21) and Blood Pressure Monitors

Summary: Between 2002 and 2004, promotional offers on Bushnell (8x21) Binoculars and Mark of Fitness Blood Pressure Monitors were inserted in CIBC’s monthly Visa statements. A Bureau investigation revealed that the regular prices claimed in the bill inserts were overstated. As part of a settlement reached between the Competition Bureau and the parties, over 2,000 Canadians will receive a refund.

Announcement:
2006-06-14 — Competition Bureau investigation leads to refunds in misleading mail-outs.

Court document:
Consent Agreement

Alan Benlolo, Elliot Benlolo and Simon Benlolo

Date: 2006-06-08 and 2005-11-25
Event: On appeal from the sentence
Court: Court of Appeal for Ontario
Court File Number: C42553 and C42481
Accused — individuals: Alan Benlolo, Elliot Benlolo and Simon Benlolo
Provision(s): 52 (1) of the Competition Act — False or misleading representations
Product: Internet business directory

Summary: Alan Benlolo, Simon Benlolo, and Elliot Benlolo appealed their sentences and fines that were imposed on them for violating the false or misleading representations provisions of the Competition Act (Section 52) for operating a Yellow Pages type scam in 2000. For more court decisions resulting from the trial, please visit the Competiton Bureau's website.

Their scam involved sending close to 900,000 mail pieces to businesses and non profit organizations in Canada. These mail pieces falsely appeared to be bills or invoices from Bell Canada or Yellow Pages, when in fact they were solicitations to have the recipients' business details appear in Internet-based directories operating under the names Yellow Business Pages.com and Yellow Business Directory.com.

After being found guilty by a jury on April 23, 2004, Madam Justice Molloy of the Ontario Superior Court sentenced Alan and Elliot Benlolo on October 1, 2004, to three years in federal penitentiary and a $400,000 fine each for their involvement in the scam. Simon Benlolo received a nine-month conditional jail sentence (including three months house arrest) and a $100,000 fine. Another individual who was involved in the scam, Victor Serfaty received a 18-month conditional jail sentence (including six months house arrest), 100 hours of community service and a $15,000 fine, though he did not appeal his sentence or fine.

The Court of Appeal for Ontario heard the appeal filed by Alan, Elliot and Simon Benlolo on November 25, 2005, and handed down its unanimous decision on June 8, 2006. The Court of Appeal dismissed the appeal of the sentences by Alan and Elliot Benlolo, but allowed the appeal of Simon Benlolo, in part, by reducing his fine to $35,000.

Court Documents:
Appeal decision:

(108610)

Fabutan Sun Tan Studios

Date: 2006-02-27
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT 2005-003
Parties: The Dosco Group Inc., Fabutan Corporation, Fabutan Studios, Douglas Scott McNabb, Fabutan Sun Tan Studios
Provision(s): 74.01(1)(a)(b) of the Competition Act - False or misleading representations and representations as to performance without adequate and proper test.
Products: Indoor tanning services

Summary: The Commissioner of Competition registered a consent agreement with the Competition Tribunal requiring Fabutan Corporation and its President, Douglas Scott McNabb, to refrain from making representations linking indoor tanning with unproven benefits of Vitamin D.

Under the agreement, Fabutan has undertaken to ensure that any messages to the public concerning any relationship to exposure to UV-B and possible health benefits associated with Vitamin D are accompanied by statements that tanning may cause premature aging of the skin and skin cancer, that mild exposure to UV-B is sufficient to generate Vitamin D and tanning is not required. Fabutan further agreed to refrain from making statements conveying the impression that tanning has proven health benefits unless such benefits have been scientifically demonstrated. The company agreed to establish and maintain a corporate compliance program, to post a corrective notice on its Web site, and to pay an administrative monetary penalty of $62,500. Douglas Scott McNabb agreed to make a charitable donation of $12,500. The Commissioner's original Application against The Dosco Group Inc. and Fabutan Studios was discontinued.

Announcement:
2006-02-27 — Fabutan agrees to stop promoting unproven health benefits of indoor tanning

Court Documents:
Consent Agreement: (PDF; 348.19 KB; 12 pages)

(3037974)

Econoco Inc.

Date: 2006-02-23
Event: Application Filed
Court: Competition Tribunal
Court File Number : CT 2006-002
Parties: Econoco Inc., Réal Laroche, Claude Tardif
Provision(s): 74.01(1)(a) and (b) of the Competition Act - False or misleading representations and representations as to performance without adequate and proper test.
Product: Econopro, a device to save fuel and reduce emissions.

Summary: The Competition Bureau has filed an application for an order with the Competition Tribunal to prevent Econoco Inc. and its directors from making misleading representations to the public about the Econopro, which is marketed as a device to save fuel and reduce emissions.

Announcement:
2006-02-23 — Competition Bureau Challenges Effectiveness of Fuel Saving Device

(3002630)

Strategic Ecomm Inc. and Matthew Hovila

Date: 2006-02-22
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court File Number: CT-2006-003
Parties: Strategic Ecomm Inc. and Matthew Hovila
Provision(s): 74.01(1), 74.02 and 74.01(3) of the Competition Act — False or misleading representations, mis-representations regarding the ordinary selling price, and mis-representations regarding customer testimonials.
Products: On-line resumé distribution services

Summary: The Commissioner of Competition registered a consent agreement with the Competition Tribunal where Strategic Ecomm Inc. and Matthew Hovila admitted their mis-conduct, and agreed to cease their on-line resumé distribution services, to remove the offending content from the websites www.oilcareers.com and www.governmentaljobs.com, to pay an administrative monetary penalty of $100,000 and to provide public notice in local Alberta daily newspaper and on-line on the above-mentioned websites

Strategic Ecomm Inc. and its sole principle, Matthew Hovila, operated an internet-based, on-line resumé distribution scheme offering guaranteed results to those seeking employment in the oil and gas industry or with US government agencies. For a fee, Strategic Ecomm Inc. and Matthew Hovila alleged that customers' resumés would be distributed to key employers in each industry. They used false testimonials to provide credibility to their service, alleged professional and exclusive relationships with major employers, and misrepresented the ordinary selling price of their services with continuously running sales to create a sense of urgency with potential customers.

Announcement:
2006-02-22 — Competition Bureau shuts down Internet-based job scams

(146379)

Fuel Saver Pro

Date: 2005-12-16, 2005-12-22, 2006-01-09
Event: Registration of Consent Agreements
Court: Competition Tribunal
Court File Numbers: CT- 2005-011, CT- 2005-012, CT- 2005-013, CT- 2006-001
Parties: Mike Stothers, Cory Grattan, Tracey Grattan, Everette Grattan, Joe Walsh.
Provision(s): S. 74.01(1)(a)(b) of the Competition Act - false or misleading representations and representations as to performance without adequate and proper tests
Products: Bogus fuel saving device

Summary: Acting on information obtained under the “Button Pusher Spam Sweep” from the U.S. Federal Trade Commission (FTC), the Bureau commenced an inquiry into the marketing practices of several individuals involved in the sale and promotion of the Fuel Saver Pro. The Bureau’s investigation revealed that between January 2002 and May 2004 Mike Stothers of Montreal, Quebec, Cory Grattan and Tracey Grattan of Douglas, N.B., Everette Grattan of Penniac, N.B., and Joe Walsh of Dartmouth N.S. worked with an American distributor of the Fuel Saver Pro. These individuals sent spam containing false or misleading representations about the ability of the product to increase fuel efficiency and reduce emissions. Extensive testing conducted on behalf of the FTC, as well as testing by the U.S. Environmental Protection Agency, has concluded that the claims about the Fuel Saver Pro could not be substantiated.

Subsequent to the Bureau’s investigation, four consent agreement were filed with the Competition Tribunal. The consent agreements, which are valid for 10 years, require the parties to not make any representations to the public, including via Internet and email, which are false or misleading; not make any performance claims to the public without having first provided proof of adequate and proper testing to the Bureau; and pay administrative monetary penalties totalling $12,000.

Announcement:
2005-12-20 — Competition Bureau joins U.S. Law Enforcement in Derailing Bogus Fuel Saving Scam

Court Documents:
Registered Consent Agreements
2005-12-19 — Cory Grattan - Tracy Grattan
2005-12-21 — Everette Grattan
2005-12-16 — Mike Stothers
2006-01-09 — Joe Walsh

(3098939)

Information on Downloading a PDF Reader
To access the Portable Document Format (PDF) version you must have a PDF reader installed. If you do not already have such a reader, there are numerous PDF readers available for free download or for purchase on the Internet: