S

Sale above advertised price.

Competition Bureau, Ensuring Truth in Advertising, Price-related Representations: “Section 74.05 of the Competition Act is a civil provision. It prohibits the sale or rent of a product at a price higher than its advertised price. The provision does not apply if the advertised price was a mistake and the error was immediately corrected.  If a court determines that a person has engaged in conduct contrary to section 74.05, it may order the person not to engage in such conduct, to publish a corrective notice and/or to pay an administrative monetary penalty of up to $750,000 in the case of a first time occurrence by an individual and $10,000,000 in the case of a first time occurrence by a corporation. For subsequent orders, the penalties increase to a maximum of $1,000,000 in the case of an individual and $15,000,000 in the case of a corporation.”

Scrubbing.

CRTC, National Do Not Call List: “This is an industry term that describes removing telephone numbers on the National DNCL from a telemarketer’s calling lists.”

Shill bidding.

New Zealand Commerce Commission: “In online auctions, shill bidding is the practice of selling goods under one membership, but bidding on them with other memberships controlled by or related to the vendor. Shill bidding is illegal because it misleads the public about the price of goods by manipulating the bids placed by genuine auction bidders.”

Six resident complaint.

Under section 9 of the Competition Act, any six residents in Canada that are age of majority and of the view that grounds exist for an order under Part VII.1 or VIII of the Act or that an offence has been committed under Part VI or VII of the Act may apply to the Commissioner of Competition to commence an inquiry.  Six resident complaints require the filing of a statutory declaration together with a brief of the alleged violations.  Upon receiving a six resident complaint, the Commissioner must commence an inquiry.  As such, six resident complaints are one mechanism to make the Commissioner commence an inquiry where the Commissioner has not acted on a regular complaint.  Having said that, while six resident complaints can be one way to apply pressure to opposing parties and/or cause the Bureau to commence an inquiry where it may not have done so otherwise, the Bureau may nevertheless choose to discontinue any inquiry commenced – in other words, there is no guarantee the Bureau will ultimately take enforcement steps once a six resident complaint has been filed (and may discontinue inquiries once commenced).

Skill contest.

A type of contest in which winners are chosen by skill not chance.  In Canada, illegal lottery offences under the federal Criminal Code prohibit, among other things, awarding property by chance or awarding goods, wares or merchandise by chance or mixed skill and chance, where entrants pay to play (or provide other valuable consideration).  As such, pure skill contests can be one way to include a purchase requirement for a promotion without violating the Criminal Code.

U.S. Federal Trade Commission: “Skill contests [are] puzzles, games or other contests in which prizes are awarded based on skill, knowledge or talent – not on chance.  Contestants might be required to write a jingle, solve a puzzle or answer questions correctly to win.”

B. Pritchard & S. Vogt, Advertising and Marketing Law in Canada, 4th ed. (Toronto: LexisNexis, 2012): “Contests can be divided into two broad categories: skill contests and contests where prizes are awarded randomly.  Until recently, skill contests – where winners are selected by experienced judges based on the contestants’ skill at story-writing, photography, etc. – were much less common.  Contests where winners are chosen at random include: sweepstakes where prizes are awarded by random draw; seeded games (including Coke’s ‘under the bottle cap’ promotions and Tim Hortons’ ‘Roll Up The Rim To Win’), where prizes are randomly seeded on game cards or on-pack, and participants must scratch, unpeel or otherwise reveal the prize area to discover whether they have won a prize;  online instant win games where consumers enter a code number (usually obtained on-pack); and ‘match and win’ games where participants must collect game pieces to spell specific words or match the pieces of a puzzle.”

Skill testing question.

Skill testing questions are commonly included in promotional contests in Canada in an effort to remove the chance element from a contest.  This is because at common law, illegal lotteries were generally defined as consisting of three elements: (i) chance, (ii) consideration (i.e., typically a cash entry requirement) and (iii) a prize (which offences have been codified in the Federal Criminal Code).  As such, based on these illegal lotteries offences, many contest organizers will often elect to remove either the consideration element (e.g., by offering a “no purchase necessary” entry option), chance element (e.g., including a mathematical skill testing question requirement to win or making a contest entirely a skill-based promotion), or both.

Slander.

Canadian Bar Association, “Defamation: Libel and Slander” (online): “Slander is the type of defamation with no permanent record.  Normally it’s a spoken statement.  It can also be a hand gesture or something similar.  The law treats slander differently than libel: with slander, you have to prove you suffered damages, in the form of financial loss, to get compensation.  But with libel, the law presumes you suffered damages.  For example, say that Bill told John you were a cheat, and then John refused to do business with you because of that.  You sue Bill and prove that you lost business with John because of what Bill said.  Bill would have to pay you for the loss of John’s business, but not for the general damage to your reputation.  It can be very hard to prove this sort of financial loss.  That’s why most slander cases never go to court.  But in the following four examples, a slander lawsuit may succeed without your proving financial loss.  Even though there’s no permanent record of the slander, the law will presume damages, as if it were libel, if someone: accuses you of a crime (unless they made the accusation to the police); accuses you of having a contagious disease; makes negative remarks about you in your trade or business; or accuses you of adultery.”

Spam.   

Government of Canada, Canada’s Anti-Spam Legislation: “Spam is considered to be any unsolicited commercial electronic message. It is often a source of scams, computer viruses and offensive content that takes up valuable time and increases costs for consumers, business and governments.”

Industry Canada, The Digital Economy in Canada: “Although there is no internationally agreed-upon definition of “spam”, many countries consider it to be any bulk commercial email sent without the express consent of recipients. Spam is no longer just a nuisance, but has quickly evolved into a vehicle for malware, threats to privacy, scams, fraud and misleading trade practices, such as phishing. It is now estimated that spam represents more than 80% of all e-mail traffic. Processing and managing spam creates costs that are ultimately paid for by businesses and personal e-mail users.”

OECD Task Force on Spam: Anti-spam Toolkit of Recommended Policies and Measures (2006): “There is no internationally agreed definition of spam, which is defined differently in national legislative approaches. For this reason the Task Force has not attempted to classify spam. Nevertheless, there are common characteristics that countries have recognized in their definitions: (i) electronic message: spam messages are sent electronically. While e-mail is by far the most significant channel for spam, other delivery channels are also considered in a number of countries (mobile spam, such as SMS and MMS, spam over IP, etc); (ii) hidden or false message origins: spam messages are often sent in a manner that disguises the originator by using false header information. Spammers frequently use un-authorized third-party e-mail servers; (iii) spam does not offer a valid and functional address to which recipients may send messages opting out of receiving further unsolicited messages; (iv) illegal or offensive content: spam is frequently a vehicle for fraudulent or deceptive content, viruses, etc. Other spam includes adult or offensive content, which may be illegal in some countries, especially if it is sent to minors; (v) utilization of addresses without the owner’s consent: Spammers often use e-mail addresses that have been collected without the owner’s explicit consent. This is frequently done through software programs which gather addresses from the Web or create e-mail addresses (harvesting and dictionary attacks); (vi) bulk and repetitive: spam messages are typically sent in bulk in an indiscriminate manner, without any knowledge about the recipient other than the e-mail address. In conclusion, there is a common understanding that spam is a threat to the Internet as an effective and reliable means of communication, and for the overall evolution of the e-economy. This common understanding has led to calls for greater co-operation among all stakeholders in finding common solutions to spam.”

Spear phishing.

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.”

Globe and Mail:  “In addition to such attacks, criminals have increasingly deployed so-called ‘spear phishing,’ or highly targeted scam e-mails. Rather than sending out generic e-mails to millions of users in the hope that a small percentage of them might fall for the con, spear phishing attacks tend to focus on just one user, who is usually a company executive. Such e-mails often contain detailed pieces of personal information about the recipient and their workplace, usually drawn from social networks such as LinkedIn. The goal is to convince the recipient that the e-mail is from a trusted source.”

“Sponsored content” or “native advertising”.  U.S. Federal Trade Commission: “The practice of blending advertisements with news, entertainment, and other content in digital media.”

Spoofed website.

Competition Bureau, Fraud Facts 2017: “A spoofed website is a site that uses deceptive means to mislead consumers into thinking that it represents a specific business, financial institution, government or charity. These websites generally imitate the real websites to sell products or services that may or may not be authentic, or to obtain sensitive financial or personal information from users. Often they will provide enough information to appear like the real thing, including the location of stores, phone numbers, terms and conditions, and logos.”

Spoofing.

Industry Canada: “Businesses are victimized by the counterfeiting of business websites to defraud individuals and businesses.”

Spyware. 

Government of Canada, Canada’s Anti-spam Legislation: “Spyware is software that has been installed on your computer without your consent. It is most often used to obtain personal information by monitoring or controlling your computer.”

Industry Canada, The Digital Economy in Canada: “Spyware is software that collects information about a user without the user’s knowledge or consent. It may also be software that modifies the operation of a user’s computer without the user’s knowledge or consent. Typical kinds of spyware include keyloggers, which send a list to a third party of the keys that a user pressed, and adware, which displays to the user advertisements selected by the adware’s owner.”

RCMP, Internet Security:  “Spyware is software that gathers information about people without their knowledge.  Generally speaking, it tracks your movements and habits on the Web and sends the information to advertising companies.  They use the information to create marketing profiles thus helping them to market their products better.  Spyware is sometimes included in free software (also known as shareware) that is downloaded from the Internet.  Often there are long license agreements (which few people read) stating that you agree to the software gathering information about your habits and sending it back to the company’s Web site.  Spyware can also find its way onto your computer via a virus.   Cookies also gather personal information about a user, but they are not considered spyware because they are not hidden.  Users can disallow cookies at any time if they choose to do so.   The use of spyware is common practice in informatics.  Even though this practice is not highly appreciated, it is not illegal and software manufacturers do not, as a rule, have criminal intent.  We suggest that you contact the manufacturer to express your apprehension and comments.  If you are not satisfied with the manufacturer’s reply, you still have the option to not use the software.  There still are basic precautions that you can take to avoid that your computer become infected by spyware.  This will also reduce the number of pop-up ads you receive.”

Subscription trap.

Competition Bureau, News Release, “Competition Bureau Announces its Top 2 on “2 Good 2 B True Day” (March 12, 2013): “[Subscription traps are] deceptive techniques designed to trick consumers and businesses into registering for recurring fees for goods or services … Consumers and businesses often do not become aware of subscription traps until they receive a bill or money is taken from their account.  Subscription traps could include inferring that a product or service is free when there are in fact charges.  Perhaps there are hidden or difficult-to-understand conditions to be met or schemes involving conditional refunds.”

Competition Bureau, Fraud Facts 2017: “Subscription traps, sometimes also referred to as Continuity Scams, can take various forms. They can appear as an advertisement featured on your favourite social media site, a referral from a friend (on Facebook, for example), a fake ‘survey’ that pops up on your computer while you’re online on another website, or from a telemarketer. No matter the form, they will always offer you a ‘free’ trial or purchase of a product, and all you have to do is simply pay the shipping and handling using your credit card. If consumers agree to this, they will find themselves signed up to a subscription service with ongoing fees and unexpected charges. Contacting the company will result in them pointing you towards their online terms and conditions, routinely buried in fine print. Unfortunately, by not returning the ‘free’ product you ordered, you agreed to a monthly subscription of that product and authorized monthly charges on your credit card. Once, you are stuck in this situation, it is often extremely difficult to put a stop to the charges.”

Sweepstakes scam.

Canadian Anti-Fraud Centre: “After entering a fake sweepstakes contest in the mail, you will receive a call within two to four weeks from a fraudulent telemarketer. This person will usually identify themselves as a lawyer, judge, customs agent or other official. They will represent themselves as an agent for a particular company. You will be told that you have won a large cash award, but money must be sent up front for taxes, etc.”

____________________

SERVICES AND CONTACT

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.

To contact me about a potential legal matter see: contact

For more regulatory law updates follow me on Twitter: @CanadaAttorney