Deceptive Prize Notices

Whether it’s a vacation, big-ticket item or cash, everyone loves the excitement of winning a prize. While most prize promotions are legitimate, some scam artists cheat consumers out of millions of dollars each year by giving them the false impression they have won a prize but must pay money or incur a cost prior to claiming it. In the end, these fraudsters are only looking for a quick way to access your money.

Whether you’ve entered a contest or not, it is not uncommon to find prize notices in your mailbox or e-mail. However, under the Competition Act, it is a criminal offence for anyone to send you a prize notice that requires you to pay before you can collect your winnings. The bottom line: If you’re told you’ve won a prize, you shouldn’t have to pay.

Canada’s Competition Bureau works to promote fraud prevention and informs Canadians about how they can recognize, report and stop fraud. For more information on deceptive prize notices, please visit www.competitionbureau.gc.ca or contact the Competition Bureau through any of the methods listed at the end of this pamphlet.

What Is the Competition Bureau?

The Competition Bureau is an independent law enforcement agency responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. Its role is to promote and maintain fair competition so that Canadians can benefit from competitive prices, product choice and quality services. Headed by the Commissioner of Competition, the Bureau investigates anti-competitive practices and promotes compliance with the laws under its jurisdiction.

What Is the Competition Act?

The Competition Act is a federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. Section 53 of the Act prohibits the sending of a notice that gives the recipient the general impression that he or she has won a prize and is asked or given the option to pay money or incur a cost prior to claiming the prize. The provision applies to notices sent by any means, including regular and electronic mail.

It’s important to note that it is not an offence if the recipient actually wins the prize and the person who sent the notice disclosed the number and approximate value of the prizes in an adequate and fair manner, distributed the prizes in a timely manner, and selected participants or distributed the prizes randomly.

What I should know before I enter a contest or claim a prize…

• Be cautious of any prize notice you receive for contests you never entered or don’t recall entering.
• Watch out for notices that require you to call a 1-900 or other long-distance number to claim your prize or receive more information about the prize.
• Remember, that if you win you should not have to pay money or incur a cost to collect or find out about your prize.
• High-pressured sales that require you to pay for an item immediately may be an indication that you are dealing with a scam.
• Make sure that you read all the details about the offer contained in any promotional material very carefully (and remember that the material may be misleading).
• Don’t assume that you have already won something.
• Filling out a ballot could mean that your name might be added to lists that are made available to deceptive and fraudulent marketers.
• Be careful in sending money up front since recovering losses from scammers will likely prove to be very difficult, especially in the case of foreign-based scammers.
• Avoid revealing bank account or credit card-related information to a business or person that you don’t know.

How Do I File a Complaint?

If you believe that someone has in some way contravened any of the legislation enforced and administered by the Bureau and you want to complain, you can telephone, fax, e-mail or write the Bureau at the numbers listed at the end of this publication.

The Bureau conducts its investigations in private and keeps confidential the identity of the source and the information provided. However, if someone has important evidence about a contravention of any of the acts the Bureau administers, that person may be asked to testify in court.

Written Opinions

The Competition Bureau facilitates compliance with the law by providing various types of written opinions subject to fees. Company officials, lawyers and others are encouraged to request an opinion on whether the implementation of a proposed business plan or practice would raise an issue under the Competition Act. These written opinions are binding on the Commissioner of Competition when all the material facts have been submitted by or on behalf of an applicant for an opinion and when they are accurate. A specific written opinion will be based on information provided by the requestor and will take into account previous case law, prior opinions and the stated policies of the Bureau.

Catalogue No.Iu54-7/20063
ISBN 0-662-49104-1