Pre-approved Loans and Credit Cards

The Competition Bureau initiated an inquiry on February 18, 2003, following the receipt of 91 complaints from victims in the United States on the telemarketing practices of two Canadian companies. More specifically, U.S. clients with credit problems were offered a MasterCard or Visa for US$197, or a pre-approved loan for only US$500.

An analysis of this matter was carried out based on the definition of "telemarketing" in subsection 52.1(1) of the Competition Act. More specifically, paragraph 52.1(3)(a) forbids a person engaging in telemarketing from making a representation that is false or misleading in a material respect, and paragraph 52.1(3)(d) forbids a person engaging in telemarketing from offering a product for a sale price grossly in excess of its market value.

Since the inquiry was opened, no other complaints regarding the activities of these two companies have been received and one of the two companies has closed.

The Bureau concluded that it would not be in the public interest to continue a parallel investigation into this company's practices under the Competition Act, since information on the remaining company was transferred to other law enforcement agencies.

This inquiry was discontinued on March 5, 2005.

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