The Competition Bureau received several complaints from businesses concerning a telemarketer’s deceptive practices when promoting the sale of florescent tubes.

While the specific details varied from complaint to complaint, the complainants consistently alleged that they received a telephone call regarding fluorescent tubes. During the call, they were offered a free gift either as a prize or as an inducement to purchase fluorescent tubes. Following the call, businesses would receive fluorescent tubes that they did not order or want at the inflated price for which they were invoiced. Some complainants alleged that when they tried to return the product, they were told they could not unless they paid the return shipping costs and, in some cases, a restocking fee. A few complainants said they were led to believe the caller was their regular supplier. Additionally, none of the complainants were told the value of the free gift.

Section 52.1 of the Competition Act specifies the information required to be disclosed in a telemarketing call. The provision further prohibits telemarketers from offering a “gift” as an inducement to buy another product, without fairly disclosing the value of the gift. Telemarketers are also prohibited from making materially false or misleading representations to promote the supply or use of a product.

Bureau staff met with an official of the telemarketing company to discuss the telemarketing provisions of the Competition Act. As a result of these discussions, the company provided written assurances that it would:

• initiate an effective compliance program maintained by a customer service representative, who will monitor the program and work with senior management to resolve any problems;
• inform staff through weekly sales meetings about the mandatory disclosure requirements of the Competition Act and the prohibition against making false and misleading representations; and
• take disciplinary action, up to and including termination, against staff found not complying with the Competition Act.

This matter was resolved in April 2007.

(3100775)