Misleading Representations and Deceptive Marketing Practices

The Bureau issued 23 written opinions concerning the criminal and civil misleading representations and deceptive marketing practices provisions of the Act. Twenty-two of these opinions dealt with the criminal provisions of the Act , specifically the multi-level marketing and pyramid selling provisions.

The written opinions covered plans for marketing a wide variety of products and services, such as health and lifestyle products, clothing, hobby supplies, travel and vacation plans, and computer software and services. Under sections 55 and 55.1 of the Competition Act , an operator or participant in a multi-level marketing plan cannot make representations about compensation unless they disclose the compensation a typical participant receives. Further, a multi-level marketing plan that features recruitment bonuses, a required volume of purchases by participants as a condition of entry or inventory loading, or that lacks a buy-back guarantee on reasonable commercial terms constitutes a prohibited pyramid scheme. More details about these written opinions can be found on the Bureau's Web site.