Archived — Direct mailer hit with record $2M fine
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Toronto, August 31, 2009 — The Competition Bureau announced today that a Toronto man who sent out millions of deceptive direct mail promotions to consumers has pleaded guilty to offences under the Competition Act and will pay a record fine of $2 million, double the amount of the revenue he received from his activities.
David Stucky, 57, has been fined for promoting a lottery ticket reselling scheme, under the name Canadian Lottery Buyers Association. In addition, Mr. Stucky was placed on probation for 18 months and received a suspended sentence for his involvement in a second deceptive scheme, a sweepstakes look-alike offer marketed under the name Canadian Equity Funding. During his probation, Mr. Stucky will donate $100,000 to charity. Mr. Stucky is also prohibited from engaging in any form of mass marketing for 10 years, and must file an affidavit with the Bureau stating his occupation once a year for five years.
Both promotions were based out of the Toronto area, but targeted customers outside of Canada.
This case demonstrates the Bureau's resolve to pursue those who try to hide behind our borders, incorrectly believing they can avoid prosecution," said Melanie Aitken, Commissioner of Competition. "
This plea agreement represents an important achievement in recognizing the significance of these types of crimes, which victimize consumers and undermine confidence in a fair and honest marketplace. Parliament has recently increased the maximum penalty for offences of this kind, which we hope will act as a further deterrent to anyone contemplating such acts."
The lottery promotion, which sold group shares of Super 7 lottery tickets, gave consumers the misleading impression that they could win tens of millions of dollars. However, in a period of just over a year and a half, consumers actually won an average of 75 cents. Mr. Stucky mailed out approximately 3.1 million copies of the lottery promotion and received approximately $1 million in revenue.
The sweepstakes look-alike offer gave recipients the false impression that they were to receive a cash prize of about $5,000 or another valuable prize on payment of a modest processing fee. In reality, almost all purchasers received a predetermined prize of an inexpensive piece of costume jewellery.
The lottery promotion was marketed to residents of the United States, Australia and New Zealand, while the sweepstakes promotion was sent to consumers in more than 200 countries. Enforcement agencies in Canada, the United Kingdom, the United States, Australia and New Zealand all played a role in this prosecution, carried out by the Public Prosecution Service of Canada. Mr. Stucky was convicted under the criminal deceptive mass marketing provisions of the Competition Act.
Consumers who suspect they have been the victim of deceptive mail are encouraged to contact the Competition Bureau's Information Centre at 1-800-348-5358, or the Canadian Anti-fraud Call Centre (formerly PhoneBusters), operated by the Competition Bureau, the RCMP and the Ontario Provincial Police, at 1-888-495-8501.
The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.
- Court Sends Warning to Fraudulent Marketers Targeting Foreign Residents
(February 2009 - Ontario Court of Appeal Decision)
- Lottery Reseller Hit with Record Fine
(December 2006 - Plea of Tom Taylor, Mr. Stucky's Associate)
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