Performance claim.

Ontario Superior Court of Justice, Canada (Competition Bureau) v. Chatr Wireless Inc., 2013 ONSC 5315 (CanLII): “The burden of proving adequate and proper testing lies upon the respondents by virtue of the express wording of s. 74.01(1)(b) of the Competition Act.  The adequate and proper test must be made prior to the representation to the public. … The phrase ‘adequate and proper test’ is not defined in the Competition Act.  Whether a particular test is ‘adequate and proper’ will depend on the nature of the representation made and the meaning or impression conveyed by that representation.  Subjectivity in the testing should be eliminated as much as possible.  The test must establish the effect claimed.  The testing need not be as exacting as would be required to publish the test in a scholarly journal.  The test should demonstrate that the result claimed is not a chance result …”

Competition Bureau, Ensuring Truth in Advertising, Misleading Advertising and Labelling: “Businesses should not make any performance claims unless they can back them up. The Competition Act prohibits any representation in the form of a statement, warranty or guarantee of the performance, efficacy or length of life of any given product, not based on adequate and proper testing. The onus is on advertisers to prove that the representation is based on an adequate and proper test. The test must have been concluded before the representation is made and the data must be readily available upon request by the Bureau.”

Personal information.

Personal Information Protection and Electronic Documents Act (PIPEDA): “ … information about an identifiable individual, but does not include the name, title or business address or telephone number of an employee of an organization.”

Office of the Privacy Commissioner of Canada: “Privacy Commissioners and courts have expanded and refined the meaning of personal information to include many things, from the commonplace (name, address and income tax returns) to the more unusual (voiceprints and tracking information collected by GPS).”


Industry Canada, The Digital Economy in Canada: “Phishing is a technique which counterfeits existing legitimate web sites and businesses, in order to obtain credit card numbers, bank account information, social insurance numbers and passwords, directly leading to identity theft and fraud.”

Consumer Protection BC: “Brand spoofing (aka phishing) happens when scammers create false website or send consumers e-mails or text messages from what appear to be well-known and trusted businesses.  When a consumer provides information to these fake sources, scammers gain access to private information such as SIN numbers or bank PIN numbers.”

CRTC: “This is a type of fraud in which a scammer attempts to impersonate a reputable person or organization, such as a bank or another enterprise with which you may have done business. The swindler sends a phony e-mail that may ask you to confirm details about your account or to supply other personal information by clicking on a bogus link.”

Competition Bureau, The Little Black Book of Scams (2012): “Phishing scams are all about tricking you into handing over your personal and banking details to scammers. The emails you receive might look and sound legitimate but in reality genuine organizations like a bank or a government authority will never expect you to send your personal information by an email or online.  Scammers can easily copy the logo or even the entire website of a genuine organization. So don’t just assume an email you receive is legitimate. If the email is asking you to visit a website to ‘update’, ‘validate’ or ‘confirm’ your account information, be sceptical.”

Government of Canada, Get Cyper Safe: “Fake e-mails, text messages and websites created to look like they’re from authentic companies.  They’re sent by criminals to steal personal and financial information from you.  This is also known as ‘spoofing’.”

RCMP, E-mail Fraud / Phishing: “Phishing is a general term for e-mails, text messages and websites fabricated and sent by criminals and designed to look like they come from well-known and trusted businesses, financial institutions and government agencies in an attempt to collect personal, financial and sensitive information.  It’s also known as brand spoofing.”

Government of Canada, Canadian Anti-Fraud Centre, “Financial Crime Trend Bulletin: Spear Phishing” (2013): “Phishing is a term for e-mails, websites or even text messages that are created and disseminated by fraudsters to ‘trick’ a person into supplying their personal information (usually user name and password).  The intent is that you will think the communication is from your bank / credit union, a business (like an upgrading request from your Google / MSN / Yahoo security) or a government institution (i.e., Canada revenue Agency) and you will trust the communication to the extent that you supply personal data.  Where a phishing email is disseminated to a random audience composed of as many email addresses collected as possible, a spear phishing email has a more selective audience. This time the fraudster has been able to collect some type of information identifying certain groups of people as having a common link.  Perhaps a company has been hacked or it could be a collection of information done through the internet (Blogs / chat groups / social networking sites).  The result is a selection of email addresses associated to a known commodity.  It could be a bank, a company or even an educational facility.  Generally there is a link in the email leading you to a very authentic looking website where you are asked to confirm or supply personal information.  Because you are at the onset familiar with the company or organization you are not alarmed and the website is very official looking so you are less likely to see a red flag that should be there.”


The Personal Information Protection and Electronic Documents Act (or “PIPEDA”) is Canada’s federal privacy legislation, which governs how organizations may collect, use or disclose personal information about individuals during commercial activities.  PIPEDA also, among other things, gives individuals the right to review and ask for corrections to information an organization may have collected about them.

Political advertising.

Advertising Standards Canada, The Canadian Code of Advertising Standards: “’advertising’ appearing at any time regarding a political figure, a political party, a political or government policy or issue, or an electoral candidate.”

Ponzi scheme.

Competition Bureau, The Little Black Book of Scams (2012): “Ponzi schemes are fraudulent investment operations that work in a similar way to pyramid schemes.  The Ponzi scheme usually entices new and well-to-do investors by offering higher returns than other investments in the form of short-term returns that are either abnormally high or unusually consistent.  The schemer usually interacts with all the investors directly, often persuading most of the existing participants to reinvest their money, thereby minimizing the need to bring in new participants as a pyramid scheme will do.”

RCMP, Investment and Securities Fraud:  “This type of scheme is named after Charles Ponzi who became notorious for using the technique in early 1920.  A Ponzi scheme is an investment fraud that promises high financial returns or dividends that are not available through traditional investments.  Unknown to the investors, returns are paid from their own money or money paid by subsequent investors rather than from profit.  This provides an appearance of legitimacy.   In a Ponzi scheme, there is no legitimate investment.  The scheme generally falls apart when either the operator flees with all of the proceeds, a sufficient number of new investors cannot be found to allow the continued payment of the promised returns, or the scheme is discovered by authorities.   Two recent Ponzi schemes include the Earl Jones case in Montreal and Bernard Madoff in the USA.   Another form of a Ponzi scheme is a called a Pyramid or Multi-Level Marketing Scheme.  In this scheme, participants earn money not by the sale of any product but by recruiting new participants to pay money to join the program.”

Pop-up ad.

RCMP, Internet Security: “Pop-up ads are those small windows containing advertisements that literally pop up during your Internet sessions. In some cases, closing the window results in the repeated opening of one or more advertisement boxes. These boxes often are generated when you are surfing a commercial site, but they can also be launched by spyware.  As a rule, these windows are perfectly harmless. However, most Web users find them annoying because they hamper their Web sessions. It is possible to reduce and even to eliminate these pop-up ads.”

Predictive Dialing Device (PDD).  

CRTC Unsolicited Telecommunications Rules:  “Any software, system, or device that automatically initiates outgoing telecommunications from a pre-determined list of telecommunications numbers.”

Premium blind network.

A mobile advertising network term.

Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Premium blind networks offer access to premium, mid-sized publisher applications.  These networks, again, do not offer much feedback and insight about the publishers you are working with.  Like the blind networks, premium blind networks are great for increasing the volume of exposure to your campaign – with the advantage of gaining access to moderately well-trafficked applications. Options of Cost-Per-Click (CPC) and Cost-Per-Install (CPI) are offered.  Advertisers opting for this type of ad network should expect a combination of self-serve tracking tools as well as direct support and targeting options.”

Premium network.

A mobile advertising network term.

Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “Premium mobile ad networks work with a smaller pool of strong, premium publisher applications. These applications garner much attention and are highly popular amongst mobile users, increasing the value of investing in utilizing premium networks for your campaign.  Publishers utilizing premium ad networks are able to pay a premium price to secure prime ad spaces on top-tier sites. Publishers opting to use premium ad networks will enjoy a heavy emphasis of direct sales support.”

Prepackaged product.

Canadian Food Inspection Agency: “means any product that is packaged in a container in such a manner that it is ordinarily sold to or used or purchased by a consumer without being re-packaged.”

See also Consumer Packaging and Labelling Act.

Pretender invoice.

Consumer Protection BC, “Top Ten Scams 2013 – Just in case a scam is around the corner”: “The “pretender scheme” is when scammers send you an invoice or bill requesting payment for goods or services.  These invoices may state that you are past the due date for payment and threaten that non-payment will affect your credit rating.  The invoices are fake and are for goods or services you haven’t ordered or received.  For example, you might be sent an invoice for a domain name that is very similar to your current domain name or for a small amount of stationery. The scammer hopes that you don’t notice the difference and just pay the invoice.”

Principal display surface.

Canadian Food Inspection Agency: “generally, it is that part of the container that is visible to the purchaser when the package is being displayed for the purpose of sale.”

See also Consumer Packaging and Labelling Regulations.

Principal display panel.

Canadian Food Inspection Agency: “generally means that part of a label applied to the principal display surface, which is the side or surface of a container that is displayed or visible under normal or customary conditions of sale or use.”  Consumer Packaging and Labelling Regulations.

“Prize-promotion,” “gimme gift”, “cheap gift” or “prize pitch” scam.

Canadian Department of Justice, Report of the Canada – United States Working Group on Telemarketing Fraud (Updated December 1, 2011): “Telemarketers ‘guarantee’ that the victims have won valuable prizes or gifts, such as vacations or automobiles, but require victims to submit one or more payments for non-existent shipping, taxes, customs or bonding fees, or anything else the offender thinks plausible.  Some schemes never provide their victims with any prize or gift, while others provide inexpensive items, often called ‘gimme gifts’ by U.S. telemarketers and ‘cheap gifts’ by Canadian telemarketers.”

Canadian Anti-Fraud Centre: “One of the most common scams is the “prize pitch”. Consumers are told they have been specially selected to win a prize, or have been awarded one of three or two of five prizes. These prizes usually include cash or a vehicle. You must purchase a product and pay in advance to receive your prize. These products may include “coin collections”, personalized pen sets, etc. The products are generally cheap or overpriced, but may sound valuable over the phone.”

RCMP, Prize Pitch (Lottery) Scams:  “The classic prize pitch scam involves victims receiving notification by post, phone, or e-mail indicating they have won a prize (monetary or other valued item).  However, in order to collect the prize the victim is required to pay various fees or taxes in advance. Victims either never hear from the organization again or receive further requests for money. If you have won a prize in Canada there are no fees or taxes to be paid.”

Promotional Contest.

Promotional contests in Canada are largely governed by the federal Competition Act (statutory disclosure and misleading advertising rules), federal Criminal Code (provisions governing “illegal lotteries” that must be avoided), federal and provincial privacy legislation (relating to the collection of entrant personal information), the common law of contract (contests have been held to be contracts) and intellectual property laws (e.g., relating to the transfer of original artistic materials, for example in skill contests, or reproduction of 3rd party logos, trade-marks or other intellectual property not owned by a contest organizer).  In addition, Quebec has a separate regime governing contests, regulated by the Régie des alcools, des courses et des jeux.

With respect to the Competition Act, subsection 74.06 makes it a reviewable (i.e., civil) matter, subject to civil penalties, to operate a contest without certain required disclosure, to unduly delay the award of prizes and also governs the selection of participants and distribution of prizes:

“A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product, or for the purpose of promoting, directly or indirectly, any business interest, conducts any contest, lottery, game of chance or skill, or mixed chance and skill, or otherwise disposes of any product or other benefit by any mode of chance, skill or mixed chance and skill whatever, where: (a) adequate and fair disclosure is not made of the number and approximate value of the prizes, of the area or areas to which they relate and of any fact within the knowledge of the person that affects materially the chances of winning; (b) distribution of the prizes is unduly delayed; or (c) selection of participants or distribution of prizes is not made on the basis of skill or on a random basis in any area to which prizes have been allocated.”

Publisher’s defence.

Competition Bureau, Application of the Competition Act to Representations on the Internet: “For reviewable conduct under sections 74.01 to 74.06 of the Act [the civil misleading advertising and promotional contest provisions of the Competition Act], a defence is found in subsection 74.07(1) for a person who merely ‘prints or publishes or otherwise disseminates a representation, including an advertisement, on behalf of another person in Canada’, so long as certain conditions are met. This exception is sometimes referred to as the ‘publisher’s defence’ but, provided its conditions are met, it applies to any person who merely disseminates or distributes a false or misleading representation. In other words, it is available to any person who does not have decision-making authority or control over the content. The required conditions which must be met under this exception are: the disseminating person accepted the representation for dissemination in good faith and in the ordinary course of its business; and the person on whose behalf the representation is being made is in Canada, and the disseminating party recorded its name and address.  The Bureau will focus its enforcement efforts primarily on businesses which are responsible for content or have a degree of control over that content, rather than on businesses operating as a conduit, that is, a disseminator or distributor of the content.”


Australian Competition & Consumer Commission: “Puffery is a term used to describe wildly exaggerated, fanciful or vague claims for a product or service that nobody could possibly treat seriously, and that nobody could reasonably be misled by.  Examples of puffery include ‘best food in town’ or ‘freshest taste ever.’”

Pyramid selling.

Competition Bureau, Truth in Advertising, Pyramid Selling: “A scheme of pyramid selling is illegal under the Competition Act. It is a multi-level marketing plan that includes either compensation for recruitment, required purchases as a condition of participation, inventory loading, or the lack of a buy-back guarantee on reasonable commercial terms.”

“Sections 55 and 55.1 of the Competition Act are criminal provisions addressing multi-level marketing and pyramid selling. Section 55 prohibits operators or participants in a multi-level marketing plan from making representations relating to compensation without fair, reasonable and timely disclosure of the amount of compensation received or likely to be received by typical participants in the plan. Section 55.1 of the Act provides that a multi-level marketing plan that includes either compensation for recruitment, required purchases as a condition of participation, inventory loading, or the lack of a buy-back guarantee on reasonable commercial terms, constitutes a prohibited “scheme of pyramid selling.  Any person who contravenes section 55 or 55.1 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 five years upon indictment.”

Competition Bureau, The Little Black Book of Scams (2012): “In a typical pyramid scheme, unsuspecting investors are encouraged to pay large membership fees to participate in moneymaking ventures. The only way for you to ever recover any money is to convince other people to join and to part with their money as well. People are often persuaded to join by family members or friends. But there is no guarantee that you will recoup your initial investment. Although pyramid schemes are often cleverly disguised, they make money by recruiting people rather than by selling a legitimate product or providing a service. Pyramid schemes inevitably collapse and you will lose your money. In Canada, it is a crime to promote a pyramid scheme or even to participate in one.”

Competition Bureau, Enforcement Guidelines, Multi-level Marketing Plans and Schemes of Pyramid Selling:  “Section 55.1 of the Act defines a “scheme of pyramid selling” as an MLM plan with one or more of the following features: requires a payment for the right to receive compensation for recruiting others into the MLM plan (compensation for recruitment); requires purchases as a condition of participation (purchase requirement), other than a specified amount of product at the seller’s cost for the purpose of facilitating sales; includes inventory loading; or lacks a buy-back guarantee on reasonable commercial terms or participants are not informed about the guarantee.  It is a criminal offense to establish, operate, advertise or promote a scheme of pyramid selling.”

Canadian Consumer Handbook:  “Multi-level marketing (MLM) is a system for selling products in which participants get paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants.  This type of marketing is legal in Canada when the plan does not contravene the Competition Act.  Referral selling, matrix marketing and binary systems are all similar types of multi-level marketing plans, though some may be illegal under the Criminal Code, the Competition Act and some provincial and territorial laws.  Under the Competition Act, MLM plans that make claims about potential compensation must also disclose the amount of compensation typical participants in the plan earn.  Pyramid selling is an MLM plan that incorporates the following deceptive practices, which make it a criminal offence under the Competition Act: participants pay money for the right to receive compensation for recruiting new participants; a participant is required to buy a specific quantity of products, other than at cost price for the purpose of advertising as a condition of participation; selling unreasonable amounts of inventory to participants; having an unreasonable product return policy.  Pyramid selling is also a criminal offence under the Criminal Code.”

Federal Government, Consumer Information website (www.consumerinformation.ca): “Multi-level marketing is a system for selling products whereby participants are paid for selling products to other participants who, in turn, are paid for selling the same products to yet more participants. This type of marketing must comply with the Competition Act.  Pyramid selling is a type of multi-level marketing that is a criminal offence under the Competition Act due to the following deceptive practices: paying money to those who recruit new members (who also pay money for the same right); requiring new recruits to buy products as a condition of participation; selling unreasonable amounts of inventory to participants; and having an unreasonable product return policy.  Pyramid selling is also a criminal offence under the Criminal Code of Canada.”

Halsbury’s Laws of Canada, 1st ed.:  “Pyramid selling is a type of multi-level marketing plan where participants pay for the right to receive compensation from the recruitment of other participants into the plan.  Those recruits also pay, in turn, for the right to receive compensation from the recruitment of further participants.  It also includes schemes where, as a condition of participating in the scheme, a participant must purchase commercially unreasonable amounts of a product.  The establishment, operation, advertisement or promotion of a pyramid selling scheme is prohibited.”



I help clients practically navigate Canada’s advertising and marketing laws and offer Canadian advertising law services in relation to print, online, new media, social media and e-mail marketing.

My Canadian advertising law services include advice in relation to: anti-spam legislation (CASL); Competition Bureau complaints; the general misleading advertising provisions of the Competition Act; Internet, new media and social media advertising and marketing; promotional contests (sweepstakes); and sales and promotions. I also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers and native advertising.

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