Bait advertising.
U.S. Federal Government, Electronic Code of Federal Regulations, Title 16: Commercial Practices, Part 238 – Guides Against Bait Advertising: “Bait advertising is an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell. Its purpose is to switch consumers from buying the advertised merchandise, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser. The primary aim of a bait advertisement is to obtain leads as to persons interested in buying merchandise of the type so advertised.”
Bait and switch.
The Competition Act contains “general” misleading advertising provisions, which generally prohibit false or misleading claims to the public to promote a product or any business interest (sections 52 and 74.01). In addition to these general misleading advertising provisions, the Act also contains a number of other sections that prohibit or regulate specific forms of marketing and advertising practices, including “bait and switch selling” (section 74.04).
Competition Bureau, Ensuring Truth in Advertising – Bait and Switch Selling: “The Competition Act prohibits ‘bait and switch’ selling which occurs when a product is advertised at a bargain price, but is not available for sale in reasonable quantities. The provision does not apply if the advertiser can establish that the non-availability of the product was due to circumstances beyond its control, the quantity of the product obtained was reasonable, or the customer was offered a rain check when supplies were exhausted.”
Competition Bureau, Pamphlet, Bait and Switch Selling: “Under the Competition Act, retailers are prohibited from advertising products at bargain prices that they do not have available in reasonable quantities. Liability will be avoided where the advertiser can establish that the non-availability of the product was due to circumstances beyond its control, the quantity of the product was obtained when reasonable, or the customer was offered a rain check when supplies were exhausted. Retailers who contravene the law may be ordered by a court to stop the conduct, to publish a corrective notice, and/or to pay an administrative monetary penalty.”
See also, Better Business Bureau (BBB) Code of Advertising: “[A] ’Bait’ offer is an alluring but insincere offer to sell a product or service which the advertiser does not intend to sell. Its purpose is to switch consumers from buying the advertised merchandise or service, in order to sell something else, usually at a higher price or on a basis more advantageous to the advertiser.”
“Bait and switch selling is when a product is advertised at a “bargain price” but the product is not available for sale in reasonable quantities.” [Section 74.04, Competition Act]. For more information, see: Competition Bureau, Misleading representations and deceptive marketing practices.
See also Competition Act, section 74.04.
Behavioural advertising.
Office of the Privacy Commissioner, Guidelines, Privacy and Online Behavioural Advertising: “Online behavioural advertising involves tracking consumers’ online activities, across sites and over time in order to deliver advertisements targeted to their inferred interests. Behavioural advertisers often use sophisticated algorithms to analyze the collected data, build detailed personal profiles of users, and assign them to various interest categories. Interest categories are used to present ads defined as relevant to users in those categories. While advertising may help subsidize the delivery of free online content desired by most users, it is nevertheless essential that online advertising practices respect an individual’s privacy rights and consent choices. Online behavioural advertising may be considered a reasonable purpose under the Personal Information Protection and Electronic Documents Act (PIPEDA), provided it is carried out under certain parameters, and is not made a condition of service for accessing and using the Internet, generally.”
Blind network.
A mobile advertising network term.
Canadian Marketing Association (CMA), “The Truth about Mobile Ad Networks”: “These networks usually have a large database of smaller-sized publisher applications. Blind networks do not offer much insight or metrics in regards to the publishers that you are working with, but can be beneficial for stimulating awareness to your campaign within a broad audience segment. Publishers are usually given an assortment of self-serve tracking mechanisms to track and monitor the success of the mobile ad campaigns.”
Botnets.
Industry Canada, The Digital Economy in Canada: “The term ‘botnet’ refers to a collection of software robots, or ‘bots’, that operate undetected on a network of infected computers (commonly referred to as ‘zombies’). Computers can become infected in a number of ways, including: viruses sent as an attachment to a spam message; clicking on pop-up windows; or visiting an infected website. In the absence of security features such as firewalls or anti-virus programs, a computer can easily become compromised and users typically have no knowledge that their computer is operating as a zombie. Once established, botnets are controlled remotely by the originator and used for distributing all types of malware.”
CRTC: “Widely considered one of the biggest online threats today, a “botnet” is a network of computers infected by malicious software robots, or “bots”. The originator of the botnet, who is usually a spammer or criminal, controls the botnet remotely and automatically. Your computer can become compromised without your knowledge when, for example, you open an infected attachment in a spam e-mail, click on certain pop-up windows, or visit a booby-trapped website. Because of their ability to grow rapidly and without attracting attention, botnets threaten the stability of the Internet and online services.”
Government of Canada, Get Cyper Safe: “A collection of software robots, or ‘bots’, that creates an army of infected computers (known as ‘zombies’) that are remotely controlled by the originator.”
Brand spoofing.
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.”
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.”
“Business card” category of implied consent (Canadian anti-spam law (CASL)).
In general, Canada’s federal anti-spam legislation (CASL) requires that senders have express or implied consent (as defined by the legislation) to send unsolicited commercial electronic messages (CEMs) to Canadians, unless an exemption under CASL applies. CASL contains a so-called “business card” category of implied consent, which requires that a recipient has disclosed their electronic address to a sender without indicating that they do not want to receive unsolicited CEMs and the message is relevant to their business. It is very important for electronic marketers to carefully review the requirements for express consent and each type of implied consent defined by the legislation.
For more information about CASL, see: CASL (Anti-spam Law), CASL Compliance, CASL Compliance Errors, CASL Compliance Tips and Contests and CASL.
For information about the CASL compliance checklists and precedents that we offer for sale, see: CASL Compliance Checklists and Precedents.
Business directory scam.
U.S. Federal Trade Commission, Bureau of Consumer Protection: “The smooth-talking voice on the other end of the line claims to need some information to ‘confirm’ your existing phone book listing. Fast forward a few weeks and your mailbox is jammed with “invoices” threatening legal action if you don’t pay up. Chances are you’ve been hit by a business directory scam. The Federal Trade Commission (FTC) and the Better Business Bureau (BBB) have seen an increase in this form of fraud. Small and medium-sized businesses, churches, and not-for-profit groups have been hardest hit. Many will pay the bogus invoices in the mistaken belief that it’s simply a misunderstanding. But it’s not. It’s a growing form of fraud run by international scam artists. How the scam works: The Call. First, con artists make cold calls to offices. They ask the person answering the phone to ‘confirm’ the address, telephone number, and other information, claiming it’s for a listing the company has in the yellow pages or a similar business directory. The scammers then fire off a rapid series of questions they may tape-record, sometimes sliding in a confusing reference to the cost. The scam works because fraudsters convince the person who picks up the phone that they’re just ‘verifying’ an arrangement the company already has with the directory. The Bill. The con artist then sends urgent ‘invoices’ for $500 or more — sometimes including a copy of the ‘directory.’ They’re usually worthless and are never distributed or promoted as promised. Often, they’re just websites with listings of various businesses. In many cases, the person paying the bills will simply cut a check, not realizing that the company never agreed to pay the hefty fee for the directory. But if businesses resist, the scammers turn up the heat, threatening collection or legal action to get payment. They may use the name of the person who answered the phone or play a ‘verification tape’ as ‘proof’ that the company owes them money. Often these tapes have been doctored or the nature of the transaction was rattled off in a way no one could have understood. If companies stand firm in their refusal to pay for services they didn’t authorize, the scammer may try to smooth things over by offering a phony discount. Or they may let the company return the directory — at the company’s own cost, of course — but insist on payment for the so-called listing. At this stage, many companies pay up just to stop the hounding. What they don’t know is that they’ll likely get more bogus invoices — either from the same scam artist or from others who have bought their contact information for a new scheme.”
Business executive scam.
Competition Bureau, Fraud Facts 2017: “Sometimes referred to as the Business Email Compromise scam, this fraud starts when a potential victim receives an email that appears to come from an executive in their company who has the authority to request wire transfers. In some cases, the fraudsters create email addresses that mimic those of the CEO or CFO. In other cases, the fraudsters have compromised and subsequently used the email account belonging to the CEO or CFO. Often, the email will indicate that the ‘executive’ is working off-site and has identified an outstanding payment that needs to be made as soon as possible. The ‘executive’ instructs the payment to be made and provides a name and a bank account where the funds, generally a large dollar amount, are to be sent.”
Business interest.
A false or misleading claim can violate the general civil or criminal misleading advertising provisions of the Competition Act (sections 52 and 74.01) where it is made to promote a product (i.e., in the context of traditional advertising or marketing of products or services) or also “any business interest”. “Business interest” has been broadly interpreted by Canadian courts in misleading advertising cases.
See for example, Commissioner of Competition v. Yellow Pages Marketing, 2012 ONSC 927 (Ont. Sup. Ct.): “… the Competition Act refers to promoting ‘any business interest’ and not just sales. The phrase ‘business interest’ must be given a wide meaning and collecting money, and threats made in relation to collection efforts, constitute promotion of the respondents’ business interests.”
For more information, see: Canadian Misleading Advertising and Canadian Misleading Advertising FAQs.
Business-to-business (B2B) marketing.
Canadian Marketing Association, Code of Ethics and Standards of Practice: “Marketing products or services to other companies, government bodies, institutions and other organizations.”
Buying group.
Competition Bureau, Enforcement Guidelines, Competitor Collaboration Guidelines (2009): “A joint purchasing arrangement is an agreement between firms to purchase all or some of their requirements for a product from one or more suppliers. Such arrangements are often pro-competitive, as they permit firms to combine their purchases to achieve greater discounts from suppliers, and share delivery and distribution costs. However, joint purchasing agreements are agreements between parties that may be competitors in respect of the purchase of the products subject to the agreement. Accordingly, joint-purchasing arrangements can substantially lessen or prevent competition where, for example, purchasers agree to fix the price at which products will be purchased as an exercise of monopsony power. Joint purchasing arrangements can take several forms, including agreements to purchase products through a jointly controlled company, contractual arrangements between a group of firms and a supplier and buying groups.”
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We are a Toronto based Canadian competition and advertising law firm that helps clients in Toronto, across Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
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