Court throws the book at “Yellow Page” business directory scam

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Four closely related companies operating a business directory scam were ordered to pay an administrative monetary penalty (“AMP”) of $8 million as well as pay restitution to everyone who paid them any money. Two individuals behind the companies were ordered to pay AMPs of $500,000 each, and a third individual was ordered to pay $35,000. These are the largest AMPs ordered to date in contested proceedings.

The case establishes two important principles:

1 Most communications between businesses and their customers, even invoices, will be considered “representations” that are subject to the Competition Act’s misleading advertising regime.

2 Businesses cannot mislead consumers in large print and rely on the fine print to “clarify” the representations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Osborne, Affleck Greene McMurtry LLP | Attorney Advertising

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