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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