Competition Bureau lays charges in $150M telemarketing scam
Federal regulators have chargedfive people and three companies with scamming more than $150 million frommore than 50,000 Canadian and American businesses over a decade.
The individuals — principals or decision makers in thecompanies— are accused of runningtelemarketing operations that sold listings in business directories that didn't exist or were useless, Don Mercer, assistant deputy commissioner of the Competition Bureau, told CBC News.
The bureau alleges the telemarketers contacted small and medium-sized businesses in Canada and the United States, claiming that they were updating information in their business directory listings and implying that the business had ordered a listing in the past.
Mercer said the tactic is calleda "presumed sale," and it takes advantage of people's trust.With amounts like$300 at stake, companies sometimes didn't pay much attention to thespending.
Atthe peak in 2002,three companies with similar names — Datacom Marketing Inc. (Ontario), Datacom Direct Inc. (Ontario) andDatacom Marketing Inc. (Quebec) — did $23-million worth of business, the bureau said.
Mercer said the companies were "real businesses," with as many as 400 telemarketers working in Montreal and Toronto at one time.
The companiesemployed students and immigrants as workers, but employees often stayed onlya fewweeks, he said.
The marketers called businesses ranging from major corporationsto doctors and mechanics. Andthe bureau received more than 150 complaints about the directories, many of which were forwarded from PhoneBusters, theanti-fraud call centre run by Canadian police.
The U.S. Federal Trade Commissionannounced this week that a U.S. district court has ordered a temporary halt and asset freeze against these samedefendants.
The investigators included the FTC,the Service de Police de la Ville de Montreal and the Toronto Strategic Partnership, a group of U.S. and Canadian law-enforcement agencies that share information and collaborate on cross-border fraud investigations.
The U.S. government recently announced that it had closed down what it claimed was $1 billion worth of dodgy schemes,including a Toronto-based operation that soldAmerican businesses directory listings that they didn't need.
The bureau said the three companies and five people face various combinations of Combines Act and Criminal Code charges.