Calling it the biggest crackdown of its kind in the country, the Competition Bureau of Canada swept down Tuesday on some 50 businesses and individuals believed to be involved in illegal telemarketing schemes.
While no arrests were made, officials say at least 10 search warrants were executed and that it’s only a matter of time before the fraudsters are rounded up.
Dubbed Operation Mirage, the initiative was meant to send a warning to scammers that they’re being watched, said deputy commissioner Andrea Rosen.
It’s also meant to raise public awareness of their modus operandi and to alert potential employees of these fraudulent businesses that what they are being instructed to do is illegal, she added.
“Montreal has a lot of students and recent immigrants,” Rosen said. “These people are looking for legitimate jobs and are easy prey for fraudulent telemarketers.”
Rosen said the scam was related to the sale of bogus phone directories, which she called a particular problem in Montreal and one that costs legitimate businesses in Canada and the United States millions of dollars.
As part of the scam, businesses are led to believe they have worked with the company before and have previously consented to the sale and need only to confirm pertinent information.
They are often pressured into the sale with promises of reduced prices and when payment is not received, they are told they will be reported to the credit bureau.
Rosen said they are led to believe they are buying space in the Yellow Pages but noted these directories are not released to the public or used for marketing.
“If you buy something from a telemarketer that is deceiving you, then you are likely to be put on a list that will be sold over and over again and you will receive many, many more phone calls for these useless products,” she said.
“Fraudulent telemarketers create an illusion of legitimacy.”
Rosen acknowledged a similar raid two years ago has yet to yield any charges, but she’s hopeful this investigation will benefit from new amendments to the Competition Act.
The changes mean penalties for criminal telemarketing offences have nearly tripled to 14 years in prison from five.
As part of the Canadian investigation, the U.S. Federal Trade Commission filed suit last week to halt the operations of three suspicious Montreal telemarketing companies.
The agency alleges the telemarketers bilked thousands of small and medium-sized U.S. businesses and non-profits of millions by getting them to pay for listings they never ordered in worthless business directories.
The complaints were filed in Illinois northern district court against Reed Publishing, National Yellow Pages Online LLC and Integration Media Inc., all of which go by a number of different names.
