Direct Mail Marketing of Lottery Subscription Services

The Competition Bureau initiated inquiry on August 10, 2000, into allegations that certain direct mail marketers, in promoting their lottery subscription services worldwide, made materially false or misleading representations. Purveyors of these services offer to play foreign lotteries on behalf of subscribers, for a service fee, the amount of which is not disclosed. The representations allegedly exaggerated the size of the prize pools available to be won, and conveyed the false or misleading impression that recipients had won a major prize, or their chances of winning a major prize would be significantly enhanced by subscribing to the service. Section 52 of the Competition Act prohibits a person from knowingly or recklessly making a materially false or misleading representation to the public in promoting the sale of a product or any business interest.

After extensive investigation, the Bureau has concluded that in some cases, there was insufficient evidence to demonstrate beyond a reasonable doubt that the representations were materially false or misleading and that a criminal offence had been committed. In other cases, the Bureau has concluded that the evidence did not disclose sufficiently strong links between deceptive marketing materials and persons or entities in Canada to establish that these parties had committed a criminal offence under the Act.

The Bureau remains committed to vigorous enforcement of the provisions of the Competition Act in investigating alleged deceptive marketing practices in the direct mail industry. Unchecked, these practices jeopardize legitimate business and contribute to the negative branding of Canada around the world as a haven for scam artists.

Inquiries are required to be conducted in private.This inquiry was discontinued on June 16, 2004.

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