In the courts: 2007

Court Proceedings, Judgments and
Court Orders - 2007

To protect confidential information, the Bureau does not reveal the names of the companies involved unless they were otherwise made public.

2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000

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Laser Depot, Corporate Supply Centre and Direct Vision Marketing

Date: 2007-12-04
Status: Before the court
Court: Court of Quebec
Court Number Files: 500-73-002788-079
Parties: 9128-6815 Quebec Inc. operating as Laser Depot; 9070-6136 Quebec Inc., operating as Corporate Supply Center; Marketing Vision Directe Inc., also known as Direct Vision Marketing Inc.; Ronald Macdonald; Emilio Ciciola and Giovanna (Johanne) Marzitelli.
Provision(s): paragraph 52.1(3)(a) of the Competition Act – deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act – deceptive telemarketing; paragraph 52.1(2)(b) of the Competition Act – deceptive telemarketing
Products or services: Toner Cartridge

Summary:

On June 8, 2007, criminal charges were laid against three individuals and three companies for engaging in alleged deceptive telemarketing activities in Quebec.

The charges stem from a Competition Bureau investigation which revealed that Canadian businesses were contacted by telemarketers who allegedly convinced them to accept and pay for toner cartridges by leading them to believe they were dealing with their regular supplier. Customers were told that a price increase was imminent and that they would be receiving a product before the price increase, thus creating the alleged impression of a cost savings. The businesses subsequently received office supplies which they would not have accepted delivery for had it not been for the alleged false representations. The telemarketers are accused of failing to disclose important information, such as the price of the merchandise offered and the purpose of the telephone call.

(3067785)

Premier Fitness Clubs

Date: 2007-11-27
Event: Registration of Consent Agreement
Court: Competition Tribunal
Court Number Files: CT-2007-009
Parties: Premier Fitness Clubs
Provision(s): 74.01(1) of the Competition Act - Deceptive Marketing Practices, Misrepresentations to the public
Products: Fitness club memberships

Summary:The Competition Bureau has reached a consent agreement with Premier Fitness Clubs, resolving the Bureau’s concerns over some of the company’s advertising practices from 1999 to 2004. The agreement was registered in 2007 with the Competition Tribunal.

Under the terms of the 10-year consent agreement, Premier Fitness Clubs is required to pay an administrative monetary penalty of $200,000.00, publish a corrective notice in three Ontario daily newspapers (the Toronto Sun, the Toronto Star, and the Ottawa Citizen) and display a corrective notice in its clubs and on its Web site. The company has also agreed to implement a new corporate compliance policy to cover its marketing practices, and abstain from making false or misleading representations in future promotional materials.

News Release : 2007-11-27 Premier Fitness Undisclosed Fees Investigation successfully Concluded

Court document: Consent Agreement

(PDF, 593Kb, 16 pages)

(PDF, 53.7Kb, 3 pages)

(3051014)

Datatech Communications Inc.

Company Name:Datatech Communications Inc., I-Point Media, CommerceCorp Consultants Inc, et al

Date: 2007-07-05
Status: Before the court
Court: Court of Quebec
Court File Number: 500-73-002784-078
Parties: Bakomichalis, Elias; Brewer, Robert; Bakomichalis, Kyriakos; Macneil, Gregory; Balyta John; SPENCER, Stacey Michael; Delormier, Wayne Matthew; Diabo, Ronald; Said, A. Zack; Quadri, (Sayyid) Shahzanish; Aguba Matthew.
Provision(s): paragraph 52.1(3)(a) of the Competition Act - deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act - deceptive telemarketing; and 52.1(9)(a) of the Competition Act - deceptive telemarketing; subsection 52(1) of the Competition Act - false or misleading representations
Products: Business to Business Directory listings

Summary:

On May 22, 2007, the Competition Bureau laid charges against 11 individuals with four counts each under the deceptive telemarketing provisions of the Competition Act for their involvement in a Montreal-based scheme directed toward businesses in the United States. The accused operated under the following names: Datatech Communications Inc.; Liberty Communications; I-Pages America; Infone Publications; I-Point and CommerceCorp.

The charges stem from a Bureau investigation of complaints it received from small and medium-sized businesses in the U.S. alleging that they had received deceptive telemarketing calls from the accused and their companies. The victims were led to believe they were receiving a call from their existing supplier of business directories to renew a subscription, when in fact the American companies had never dealt with the accused previously. As part of the alleged scam from 2000 to 2004, telemarketers contacted their victims, claiming that they were updating information in their business directory listings. The telemarketers implied that the business had ordered a listing in the past and that someone in the company had already authorized an order.

(3016242)

Polar Spas

Date: 2007-04-12
Event: Default Judgment
Court: Federal Court
Court File Number: T-2069-06
Parties: 732311 Alberta Ltd.
Polar Spas (Edmonton) Ltd.
Polar Spas Inc. (British Columbia)
Ken Nickel
Provisions: 74.01(1)(a) False or misleading representations
74.12 Consent agreement
Products: Hot tubs, home leisure products

Summary:

The Commissioner of Competition was granted a default judgment against Polar Spas, an Alberta-based hot tub dealer, and Ken Nickel, the company’s president, for breaking their commitments to pay monetary penalties under the terms of a consent agreement negotiated between the parties in August 2006.

In the consent agreement, Polar Spas gave an undertaking to cease making false or misleading representations, and to disclose all material conditions and restrictions that apply to offers of cash back and rebates. The company ran a “cashable vouchers” promotion in 2004 and 2005 using advertisements, radio commercials and verbal representations made by sales staff. These ads conveyed the impression that customers were guaranteed to get 75% of their purchase price back in cash, provided they passed a “financial memory test” and remembered to apply for the rebate three years from the date of purchase. However, there were other stringent conditions that had to be met, and the final value of the voucher was contingent on the number of claims filed.

The company was to pay an administrative monetary penalty of $35,000 and Ken Nickel was to pay a penalty of $10,000. Registration of the agreement with the Competition Tribunal was contingent on payment of the monetary penalties, which was due 20 days after execution of the agreement. As payment was not received, the agreement has not been registered and the Commissioner subsequently filed a statement of claim in Federal Court. Neither the company nor its president filed a defence.

News release:
2007-04-12
Bureau obtains judgment against Polar Spas in deceptive marketing case

Court documents:
Statement of Claim
Motion for Default Judgement
Order - Federal Court file T-2069-06

(3082256)

Edward Harry Leefe, Lexcan International Corp.

Company Name: Company:Lexcan International Corp. (Ontario Corporation Number 1038191- also doing business as The Calcom Business Centre and Lexam International Corp.), MPL, and H & P Communications Inc. (Ontario Corporation Number 1038192).

Date: 2007-03-30
Event: Guilty Plea/Prohibition Order
Court: Ontario Superior Court of Justice
Court File Number: F609/05
Parties: Edward Leefe, Lexcan International Corp, H&P Communications Inc., Shirley Herrell
Provision(s): 52.1 (2) (a); 52.1 (2) (b); 52.1 (3) (a) - Deceptive Telemarketing provisions of the Competition Act, 52(1) (a) - False or Misleading Representations provision of the Competition Act, (precedes 1999 telemarketing amendments), 380 (1) (a) - Fraud Over $5,000 provision of the Criminal Code, 354 (1) (a) - Possession of Proceeds of an Indictable Offence provision of the Criminal Code, and 145(5.1) - Failure to Comply with an Undertaking provision of the Criminal Code.
Products: toner products

Summary:

The Competition Bureau began an investigation into the telemarketing operations of Lexcan International Corp. and H&P Communications after complaints surfaced regarding the promotion and collection of fees for the sale of toner products to businesses that had not placed an order for such products.

Based on false and misleading representations, the operation, owned by Edward Leefe, persuaded victims to pay exorbitant prices for toner products and re-manufactured cartridges by means of aggressive collection practices and the threat of court action.

Mr. Leefe pleaded guilty to Competition Act and Criminal Code charges, and the Superior Court of Ontario imposed a $50,000 fine and an 18-month conditional sentence on Mr. Leefe. An additional fine of $1.5 million was levied against Lexcan International Corp. and H&P Communications, and over $78,000 worth of seized cheques were ordered to be returned to the victims. Mr. Leefe and the corporations are prohibited from engaging in any form of telemarketing for a period of 10 years.

Agreed Statement of Facts & Judges Reasons for Sentencing (attached)

News Release:

http://www.competitionbureau.gc.ca/epic/site/cb-bc.nsf/en/02295e.html

(PDF, 1,300 KB, 23 pages)
(PDF, 379.2 KB, 13 pages)

(167668)

Ambus Registry Inc.

Company Name: Ambus Registry Inc.
Date: 2007-01-30
Event: Guilty Plea
Court: Provincial Court of Alberta
Court File Number: 060772282P10104
Parties: Sarah Catherine Schaefer
Provision(s): s. 52.1(3) of the Competition Act - Deceptive telemarketing.
Products: Business Directory on CD Rom

Summary: Sarah Schaefer (a.k.a. Juliet Schafer) pled guilty before Mr. Justice Delong on Thursday, January 30, 2007 at 2:00 p.m. in Courtroom #310. Her guilty pleas were to counts 7 and 8 of the INFORMATION before the Court which were:

• telemarketing that was false or misleading with respect to whether an order had previously been made (count 7 – s. 52.1(3)(a) CA); and
  
  
• telemarketing that was false or misleading with respect to whether an order was subject to a 30-day guarantee (count 8 – s. 52.1(3)(a) CA).

A joint submission for a $15,000 fine (in default 10 months) with a request of 6 months to pay. A transcript of the sentencing hearing and the decision of the Judge has been ordered. A letter to all remaining counsel is being sent advising of the guilty pleas. An agent for the Attorney General of Alberta Ms. Photini Papadatou registered an Agreed Statement of Facts.

Sarah Schaefer is one of seven individuals charged in this case.

News Release:
June 15, 2006 - Albertans Charged for Scamming American Businesses

(3019012)

Kinito Inc – Kinito Benefit Services (KBS) – First Approval Benefits (FAB) – ACMS

Date: 2007-01-22
Status: Before the court
Court: Court of Quebec
Court Number Files: 500-73-002710-073
Parties: 9094-5114 Québec Inc., Nikolaos Rothos, and Stelios Vrontakis
Provision(s): paragraph 52.1(3)(a) of the Competition Act – deceptive telemarketing; paragraph 52.1(2)(a) of the Competition Act – deceptive telemarketing; paragraph 52.1(3)(d) of the Competition Act – deceptive telemarketing; subsection 52(1) of the Competition Act – false or misleading representations
Products or services: Credit Cards

Summary: On January 22, 2007, the Competition Bureau laid criminal charges against the following two individuals for allegedly engaging in deceptive telemarketing activities in Quebec: Nikolaos Rothos, 31, from Brossard; and Stelios Vrontakis, 31, from Longueuil. The company 9094-5114 Québec Inc., which also operated under the names Kinito, Kinito Benefits Services (KBS), First Approval Benefits (FAB), and ACMS, was also charged.

The victims, residing in the United States, were contacted by telemarketers who claimed they would send them a credit card with a pre-authorized limit, in exchange for payment. The credit cards were never delivered to the victims. The telemarketers additionally made representations that were false or misleading by giving the victims the impression that the company issued credit cards. Rather than receiving a credit card, the victims received a document enumerating a list of banks, for the purpose of applying for a credit card.

(3033271)