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Deceptive telemarketing

Section 52.1 of the Competition Act is a criminal provision. It prohibits the making, or the permitting of the making, of materially false or misleading representations in promoting the supply of a product or a business interest during person-to-person telephone calls. Telemarketers are also prohibited from engaging in certain practices including: requiring payment in advance as a condition for receiving a prize that has been, or supposedly has been, won in a contest or game; failing to provide adequate and fair disclosure of the number and value of the "prizes"; offering a "gift" as an inducement to buy another product, without fairly disclosing the value of the gift; and offering a product at a grossly inflated price and requiring payment in advance. This provision also requires that telemarketers disclose: the name of the company or person they are working for; the type of product or business interest they are promoting; the purpose of the call; the price of any product being sold and any restrictions or conditions that must be met before the product will be delivered. Directors and officers of a corporation may be held liable for offences committed by the corporation under this section. Subsection 52.1(4) directs that the general impression conveyed by a representation, as well as its literal meaning, be taken into account when determining whether or not the representation is false or misleading in a material respect.

Any person who contravenes section 52.1 is guilty of an offence and liable to a fine of up to $200,000 and/or imprisonment up to one year on summary conviction, or to fines in the discretion of the court and/or imprisonment up to 14 years upon indictment.

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