Multi-level Marketing Firm Charged for Misleading Participants

Case Update

OTTAWA, August 29, 2002 – The Competition Bureau announced today that eight charges were laid in Halifax, N.S., against All Communications Network of Canada Co./ACN, Reseau De Toutes Communications Du Canada C.R.I., under the Competition Act's deceptive marketing practices provisions. The company, whose registered corporate office is in Halifax, operates a multi-level marketing plan which promotes and sells long-distance telecommunication services.

The Competition Bureau alleges that ACN Canada, as it is known, and its participants, through its web sites and at public meetings, recruited new participants by exaggerating income expectations without disclosing the income of a typical participant. Under the Competition Act, it is illegal to make reference to earnings in a multi-level marketing plan without disclosing a typical participant's income. In addition, operators of a multi-level marketing plan must ensure that any income representation made by a participant in the plan includes disclosure of a typical participant's income.

Furthermore, ACN Canada was charged with operating an illegal scheme of pyramid selling by offering recruitment bonuses to participants who paid for the right to recruit other participants.

"We are committed to ensuring that Canadian consumers are protected from deceptive recruitment practices by multi-level marketing companies," said Raymond Pierce, Deputy Commissioner of the Bureau's Fair Business Practices Branch. "We will continue to thoroughly investigate such cases in our continued efforts to provide Canadians with a marketplace that is both fair and free of deceptive business practices."

Consumers who suspect they have been the victim of deceptive business practices or who want information on the application of the Competition Act should contact the Bureau's Information Centre at 1-800-348-5358, or visit our Web site at www.cb-bc.gc.ca.

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.

For media enquiries, please contact:
Maureen McGrath
Senior Communications Advisor
Communications Branch
(819) 953-8982, or (613) 296-2187 (cell)

For general enquiries, please contact:
Information Centre
Competition Bureau
1-800-348-5358