Multi-level marketing firm pleads guilty to misleading participants

OTTAWA, March 11, 2005 - The Competition Bureau announced today that NSV Nutrinautes Inc. was fined $75,000 and its Vice-President, Richard Arsenault, received a conditional jail sentence of two years less a day after both pleaded guilty in Quebec Court to four charges under the Competition Act's deceptive marketing practices provisions.

NSV Nutrinautes Inc., a Quebec-based company which operated a multi-level marketing plan known as Cocooning Club, and Mr. Arsenault pleaded guilty to violating the multi-level marketing, pyramid selling and general misleading representation provisions of the Act.

"The Competition Bureau is committed to actively pursuing companies and individuals engaged in operating multi-level marketing plans outside the scope of the law," said Raymond Pierce, Deputy Commissioner. "We will continue to ensure that Canadians can enjoy a marketplace that is both fair and free of deceptive business practices."

A Bureau investigation found that Cocooning Club and participants in its multi-level marketing plan made representations on Web sites and in a television infomercial that exaggerated income expectations without disclosing the income of a typical participant in the plan. Under the Competition Act, it is illegal for a multi-level marketing company or its participants to make reference to earnings in a multi-level marketing plan without disclosing the income of a typical participant.

Mr. Arsenault received a conditional jail sentence of two years less a day and a 10-year prohibition order preventing him from being involved in any future multi-level marketing plans. Charges against two other individuals, Richard Guertin and Marc Delisle, remain outstanding.

Consumers who suspect they have been the victim of deceptive business practices or who want information on the application of the Competition Act should contact the Bureau's Information Centre at 1-800-348-5358, or visit the Web site at www.cb-bc.gc.ca.

The Competition Bureau is an independent law enforcement agency. We contribute to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.

For media enquiries, please contact:

Maureen McGrath
Senior Communications Advisor
Communications Branch
819-953-8982, or 613-296-2187 (cell)

For general enquiries, please contact:

Information Centre
Competition Bureau
819-997-4282
1-800-348-5358