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Five charged in 10-year telemarketing scam
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CTV.ca News Staff
Date: Mon. May. 29 2006 8:22 AM ET
Five people and three companies in Ontario and Quebec are facing charges over a 10-year alleged telemarketing scam that duped tens of thousands of businesses across North America, the Competition Bureau announced Friday.
Charges were laid against Judy Neinstein, 62, of Toronto; Bernard Fromstein, 54, of Oakville, Ont.; Paul Barnard, 54, of Ajax, Ont.; James Sharo, 56, and George Pavlopoulos, 35, both of St-Hubert, Que.
Datacom Marketing Inc., Datacom Direct Inc., and Quebec affiliate Datacom Marketing Inc., are also charged with counts under both the Competition Act and the Criminal Code, the bureau said Friday.
The bureau alleges that at the peak of its operation in 2002, Datacom duped over 50,000 Canadian and American businesses out of more than $23 million.
The bureau estimates Datacom did more than $150 million in business during the 10-year period under investigation.
The bureau says that Datacom telemarketers scammed small- and medium-sized businesses in Canada and the United States, claiming that the companies had ordered a business directory listing and that an employee had already authorized such an order.
"The telemarketers failed to disclose important information, such as which company they represented, the price of the directory, the terms and conditions to return it, the purpose of the call and the nature of the product, as required by the telemarketing provision of the Competition Act," the bureau says in a statement.
"The businesses subsequently received a business directory, which they likely would not have ordered had it not been for the false representations."
The bureau received more than 150 complaints about the business, many of which were forwarded from PhoneBusters, the Canadian Anti-Fraud Call Centre.
This investigation was conducted with the assistance of the Federal Trade Commission in Chicago, the Toronto Strategic Partnership and the Service de Police de la Ville de Montreal.
The American Federal Trade Commission also announced this week that a U.S. district court ordered a temporary halt and asset freeze against the defendants.
Competition Bureau Assistant Deputy Commissioner Don Mercer urged business to take steps to protect themselves against fraud.
"The main thing is to tighten up their financial systems and the second thing is to get employees to understand that when strange companies call that they haven't heard of ... they should make sure that they say 'no' to the order and leave it at that," Mercer said, appearing on CTV's Canada AM.
"But the other thing is never to pay invoices unless you're absolutely certain you have ordered the material."
The charges laid follow an investigation into mass-marketing fraud scams that netted more than 560 arrests across three continents.
Losses exceeded $1 billion US in scams that included bogus lotteries, deceptive spam, sweepstakes fraud, and invitations to pour money into nonexistent investments, the department said, American authorities announced earlier in the week.
The 14-month probe, which was christened Operation Global Con, resulted in 139 arrests in the United States, 96 in Canada, plus others in Costa Rica, the Netherlands, and Spain, since March 1 of this year.
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I applaud the budget, even though Health Care and education may stay unscathed. Sadly this cannot last and I worry to later this year where cuts will become enviable. If anything, this provides the Wildrose Alliance plenty of ammo when an election is called.

