STANDING COMMITTEE ON INDUSTRY

COMITÉ PERMANENT DE L'INDUSTRIE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, March 23, 2000

• 0902

[English]

The Chair (Ms. Susan Whelan (Essex, Lib.)): I will call the meeting to order. The subject matter is Bill C-229, an act to amend the Canada Post Corporation Act for a letter that cannot be transmitted by post.

We're very pleased to have with us this morning Barry Elliott, detective staff sergeant, coordinator of the PhoneBusters project, and from the Canadian Association of Retired Persons, Rolf Calhoun.

I would suggest that if you both have an opening statement, you could begin with that. We'll start with Mr. Elliott and then go to Mr. Calhoun, and then we'll go to questions together, if that's okay.

Mr. Elliott, whenever you're ready.

Detective Staff Sergeant Barry Elliott (Coordinator, Project PhoneBusters): Thank you.

First of all, PhoneBusters is a national call centre. It has been a national call centre for deceptive or fraudulent telemarketing since 1997. We've been around as a task force since 1993; I first discovered fraudulent telemarketing to be a very serious Canadian problem in 1991. Since 1995, when we kept our most accurate statistics, I can tell you that we've received approximately 100,000 complaints from Canadian and U.S. victims. Of those 100,000 complaints, about 70,000 are from Canadians.

The interesting thing to note, generally speaking, on most telemarketing fraud, and the main problem in Canada, is that up to now it has been what we call the prize pitch, which is centred around deceptive mail-outs where people will enter contests and lotteries that don't exist. These sucker lists that are generated from these contests are used to have people call them back to say they are lawyers and judges acting as agents for the contests, and they get them to send the $10,000 up front to pay for the taxes on the $100,000 the people supposedly won.

• 0905

Among the other complaints we get, we have these 900 number mail-outs. We've had a number of these come to our attention over the past few years. It's a new phenomenon that's unique to Canada.

Of course, the one problem we have with 900 numbers is that a lot of people across the country, especially our seniors, don't know that a 900 number is an automatic charge to your phone bill. We've had to spend a lot of time trying to make sure that we educate the seniors that this is a charge to your phone bill when you call. In most cases it's around $25; that's when you call on these scratch-and-win cards. Of course you have sex lines, psychic lines, and other things that are associated with 900 numbers.

Some of the problems we have with these 900 mail-outs is that they are deceptive and fraudulent. They're designed to create the illusion that you are a winner, and they're designed to create the illusion that you should call this 900 number right away because, for example, you've just won $5,000, like in this particular case that was the last mail-out last summer. You can see this one I have with me. I'll pass it around. I've lectured across the country, and these cards were mailed out across the country, millions of them.

For most people here that play poker, you know that four aces and a king is a pretty good hand. If you look at the back of the card, you see that there are five examples of poker hands that are going out on these scratch-and-win cards. If you look at the order, four aces and a king is the best hand there. You have four eights, three threes, and an ace, four fours and an ace, and four threes and an ace. Now, when you look at the back, the best hand happens to run across laterally to the best prize, which is $5,000. So again, it doesn't say explicitly that you've won $5,000; it's creating the illusion that you've won $5,000.

So you very excitedly, instead of reading the fine print, see that you can call a 900 number right away, for $24.95. A phone call is pretty quick. You can get that $5,000 cheque in the mail and claim your winnings and it only costs you $25. But when you call the number you get an automatic recording and, unfortunately for you, in Kitchener they play poker in a different way than you do. The best hand back here is four eights.

I've lectured across the country and I haven't found one person yet, at any of my lectures or any of the media interviews I've done, that has gotten something different from four aces and a king. So they don't play poker the same way as we do in Kitchener.

The other problem you have with these things is that you find out that with four aces and a king you win an authentic colour print, which isn't worth very much, and you may or may not get the authentic colour print delivered to you.

This particular mail-out was closed down prior to the contest ending. The 900 number was shut down for different reasons.

One of the things that has happened too, and of course, as I said, the poker card... This one I have here is the last poker card that was mailed out. The last mail-out of this was in the summer of last year, which is unusual, because usually every special holiday there's a new scratch-and-win card being mailed out, whether it's at Easter, at Christmas, on Valentine's Day, or on special days like St. Patrick's Day. They always design something around a holiday and do these mail-outs. We haven't seen a new mail-out since the summer of 1999.

There was a conviction registered against Infotel and Cave Promotions, which are basically the same company, but with one operating out of Montreal and one operating out of Calgary. Cave Promotions was originally created out of Calgary because Infotel was having a tough time getting these 900 numbers from Bell Canada. They opened up a business in Calgary so they could get the 900 numbers approved through Telus, which is another service provider. They were able to do so, up until the conviction that was registered against Cave Promotions and Infotel last year under the Competition Act through Industry Canada.

• 0910

They received a fairly small fine of $80,000, but the fine wasn't as important as the judgment. The judgment gave the ability for the service provider to say no to any of these cards coming in if they don't meet the requirements that were provided in that judgment.

Industry Canada has convicted this particular group on old legislation; it wasn't under the new legislation that was specifically designed to fight fraudulent telemarketing. Unfortunately, the mail-out was previous to that legislation coming in. That's my understanding.

Given the new legislation the Competition Act has, we were hoping that these 900 scratch-and-win tickets would fall under that Competition Act legislation to stop them from coming out. The problem was when they put that legislation through it included live voice only. There was a loophole in the legislation that would allow them to do these 900 mail-outs and it wouldn't fall specifically under the Competition Act.

We've asked Karen Redman's office—and I think it's part of these hearings—that they amend the Competition Act legislation to include computer voice as well as call message voice, as well as not only that it be illegal to pay an advanced fee under the illusion that you've won a prize, but to specifically say that the advance fee also includes a 900 number, which really is an advance fee by being automatically charged.

Of all of these complaints I've told you PhoneBusters receives, at one point in time earlier when we first started collecting these complaints, we were only getting about 1% of all the complaints, because most people are too embarrassed to report the crime. We now believe that we're getting about 10% of the number of victims who are out there when it comes to prize pitch, which is the most common complaint.

When it comes to 1-900 complaints, we're getting less than half of 1% of the actual number of victims. For example, on one case we did there were 46,000 calls that had been received and we had under 50 victims. So you can see that because of the fact that it is only $25 most consumers don't bother taking the time to complain about it.

The other area we redressed and tried to make sure the consumer knew about when it comes to 900 numbers was that if you haven't paid your phone bill that month and you feel you've been deceived on a 900 mail-out, we suggested that you don't pay that portion of your phone bill and make a note when you put your statement in to remove the $25 charge on your phone bill. Bell Canada or the service provider you're with will do so, and it can't affect your service.

What they would do is take that unpaid portion off the phone bill and send a notice to the company in question, which in this case would be LRJ out of Kitchener, that Barry Elliott has made the phone call, but has advised us that he refuses to pay the bill; here's your unpaid notice, and it's up to you to collect the money now.

The beauty of 900 numbers is you don't have to have any employees; you just have to have an answering machine. Bell Canada, or whatever service provider is out there, collects the money for you and sends you a nice cheque. They take off a percentage for each call. And whatever percentage they take off they also make money on it.

The fact that we have 2,000 complaints on PhoneBusters' database with only approximately 350 victims—the other ones are all inquiries or complaints about this mail-out—doesn't allude to the fact that it's a small problem. In fact, we estimate that there are over 100,000 victims out there with all these different mail-outs that have gone out, but there's no real way of telling exactly how many victims there are unless you audit all the books.

The problem with 900 numbers, I hate to say, has not been solved, even though we haven't had any mail-outs since the summer of last year. We really applaud Karen Redman's move to try to make sure that we don't have any more of these mail-outs. These things that are deceptive and prey on the seniors across the country shouldn't be allowed.

• 0915

There are two places where you can stop it: at the 900 request through the service provider for the telephone company, and through Canada Post. The Competition Act, as I say, needs to be fixed up to make sure that the loopholes are covered.

As far as Canada Post is concerned, I'm not sure what they can do. I'm not sure what they can change within their act; we find them very hard to deal with in approaching them to be proactive. We have a number of other issues regarding mail and sweepstakes mail-outs that we've wanted to discuss with them, but they take the view that it's not their problem, it's a police problem—that they get the mail and they just deliver it.

I'm sure that if they were able to work in conjunction with say the Competition Act as well as their own act, there would be a number of ways whereby they could probably work together to make sure that these deceptive contests don't end up in the mail.

I alluded to the number one problem in this country as far as mail is concerned and how the sucker lists are created through these fake sweepstakes contests and these fake lottery contests, which Canada Post is more than happy to deliver. One of the big problems we have in this country is that with these sucker lists that are being created, and subsequent victims—again mainly seniors—most of our victims in this area are over sixty.

We had a woman just two days ago in California who committed suicide. She lost $66,000 and she was too embarrassed to tell her husband about it and killed herself. And the person who we think did it we've convicted twice already in criminal court.

This is a very serious matter. We've approached Canada Post on numerous occasions to try to work with us to try to be proactive in a number of areas. They are not just involved in mailing out these contests, but they play a major role in picking up the money from these victims.

We work very closely with the courier associations across the country. The number one method for you to lose your money over the phone is through the prize pitch. The number one method for you to send your money today is by going down and getting a money order or a bank draft, and a courier company is arranged by the criminal to come to your house and pick up the money. That's the fastest way they can get that money order to their location, which is mainly in Montreal.

The number one courier of choice in this country for between 70% and 99% of all the victims who are being picked up is Priority Post, which is owned by Canada Post. And the reason they're so popular is because they refuse to return the package if the sender, the victim, discovers prior to deliver that they may have been defrauded. They get talking to a relative, a friend, PhoneBusters, or the police, who say “If you sent $10,000 because you've won $100,000, and you don't have to pay any taxes up front, you've probably been scammed. You'd better call the police right away.”

Every day at our office we get people calling us who have sent a package by Priority Post, and we can't do anything about it, because Priority Post and express mail fall under the Canada Post Act—which I don't think has been amended since 1742—so it will be delivered.

If you send it by FedEx, and if they haven't delivered it yet, they'll return the package to the sender. And any other courier company will do the same thing. They may charge you a return trip, which may cost you $10 to get your $10,000 back, which you'd be more than happy to pay, but you'll get your money back.

And of course the criminals know that Canada Post, and Priority Post and express mail, falls under this old legislation, whereby as soon as they take possession of it, they can't give it back; it belongs to Canada Post and they shall deliver it. They will not hold it for a search warrant. They will not hold it for anything. The only time the police can get their hands on it is after they've delivered it.

Now, we've approached—

The Chair: Sorry, I'm going to have to ask you to wrap up.

• 0920

Detective S/Sgt Barry Elliott: I'm just going to wrap up.

We have approached them and asked them to consider changing their policy and amending, if they have to, the legislation to allow them to return the mail, which would help seniors across this country who are being defrauded by telemarketing fraud.

Thank you for allowing me to make those comments.

The Chair: Thank you very much, Mr. Elliott.

I am now going to turn to Mr. Calhoun. Mr. Calhoun, do you have some opening comments for us?

Mr. Rolf Calhoun (Spokesperson, Canadian Association of Retired Persons): Good morning, Madam Chairman, committee members, and all the other persons present. I'm Rolf Calhoun, representing CARP, Canada's association for the 50-plus.

CARP would like to support the adoption of provisions to combat fraud perpetrated against seniors.

I would like to request that the chair include our presentation as part of the committee proceedings. I have available ten copies, regrettably, I might say, all in English, as CARP lacks resources to also provide the document in French. Please let me go through CARP's presentation, after which I would be pleased to respond to inquiries.

First of all, I should explain that we find the proceedings, as we have learned about them, to be slightly confusing, in the sense that this is a hearing about Bill C-229. On the other hand, it's our understanding that Bill C-438 is the one that has current attention, and we understand that Bill C-229 has been withdrawn in favour of Bill C-438. Nevertheless, in general, whichever bill may make it through Parliament, we encourage the adoption of these measures outlined in these bills that will help reduce crimes against seniors.

I'd like to give you a few words about CARP, Canada's association for the 50-plus. We're the largest national association of mature Canadians in the country, representing over 400,000 members across Canada. Our members are 50 years of age and older. Many are retired, but of course many are still working. That accounts for the change of our name, which used to be the Canadian Association of Retired Persons, which brings you the initials CARP.

CARP is a non-partisan association. Our mission is to express concerns of mature Canadians, and indeed all Canadians, regardless of age. Our mandate is to provide practical recommendations for the issues we raise.

We also provide information of interest to 50-plus Canadians through our award-winning magazine CARPNews Fifty Plus, which is this magazine. It looks rather like Maclean's, and it's currently thicker than Maclean's. We operate a website called “Fifty-Plus.Net”, and we have provided access for our members to a number of group savings plans, such as home insurance, auto insurance, health coverage and travel savings.

CARP has been engaged in combatting scams and frauds for many years and in many ways. CARP sponsored a video to raise awareness about scams and frauds, which has played on a number of TV stations across North America.

CARP hosted a national forum on scams and frauds in 1998, which developed 25 practical recommendations, many of which, according to a recent letter from the Honourable Lawrence MacAulay, Solicitor General of Canada, have been implemented in one form or another. Copies of the report recommendations of the national forum are available.

CARP hosts annual workshops to raise awareness of how to identify and protect oneself from scams and frauds. CARP staff refer telephone calls and correspondence we receive to appropriate authorities when fraud is suspected. CARP alerts members about scams and frauds through the pages of our magazine Fifty Plus.

CARP supports Bill C-229 and Bill C-438. Inasmuch as we understand Bill C-229 is withdrawn, we certainly support in principle those attempts in Bill C-229 to combat fraud. Failing that, we're in favour of Bill C-438, which we understand is much more comprehensive, and it appears to be so as we read through the text of the two.

• 0925

The promise of a prize or other benefit to a participant in a contest, lottery, or game that is or is represented to be conditional on the prior payout of any amount by the participant by cheque, money order, or through a telephone call, as Mr. Elliott has said, frequently via a 1-900 number, is a serious crime, which must be stopped by the most effective legislated means possible. This provision is the crux of this bill, in our opinion.

The statistics that form the background to Bill C-438 provide the rationale in the starkest manner for CARP's support of this legislation.

According to PhoneBusters, between 1996 and 1998, 81% of telemarketing victims were over 60 years of age and lost more that $25 million. Between 1998 and 1999, $9.6 million had been returned to victims of telemarketing fraud. This represents only 12% of the estimated $80 million a year that enters Montreal from deceptive telemarketing. The source of this is Staff Sergeant Laurier Quesnel, Montreal RCMP, as quoted in M. Lewyckyj, “Watching out for mail fraud”, the Toronto Sun, March 15, 2000.

Frauds and scams must not be regarded by the Government of Canada or the courts as victimless or white collar or soft crimes. Money stolen from retired seniors cannot be replaced from employment income. The remaining years of their life, possibly reaching the age of 100 years, will forever be burdened and adversely affected by the loss of these funds.

CARP supports the issuance of an injunction if fraud is suspected, with a proviso outlined in paragraph 1.(1)(b) and subclause 1.(2) of Bill C-438.

We support the comprehensiveness of clause 2—that is, the proposed new section 52.2 of the current Competition Act. We do not believe that anyone who supposedly wins a prize should be charged for any telephone calls related to that prize, as recommended in proposed subsection 52.2.(2).

We believe the wording of proposed subsection 52.2.(3) regarding due diligence must be clarified to protect legitimate telemarketers and scratch-and-win games.

We support proposed subsection 52.2.(5), which places responsibility on the directors and officers who are in a position to direct or influence the policies of a corporation that is found guilty of engaging in fraudulent scratch-and-win games and other types of frauds and scams.

We endorse the imposition of fines and sentences in this bill, as outlined in proposed subclause 52.2.(6), although we urge that these fines and sentences should be reviewed to ensure they are commensurate with the nature of the crime. As well, we urge that these sentences and fines should be vigorously imposed by the courts on those found guilty of engaging in this crime.

Frauds and scams can be characterized as a form of elder abuse. Our maritime provinces and many American states have legislated anti-elder-abuse laws that focus mainly on financial abuse. Studies have demonstrated, however, that these laws may not be effective in stopping abuse any more than the laws of the Criminal Code have stopped frauds and scams across the country.

The most effective way to thwart frauds and scams is to make clear the message that those found guilty of these crimes will be seriously punished. Therefore, we have advised that the punishment noted in Bill C-438 must be rigorously applied and indeed reviewed to determine that they are vigorous enough relative to the heinous nature of the crimes so that the possible length of imprisonment for those found guilty may be increased.

Victims must also be provided with direct, simple, and automatic forms of restitution from those found guilty of stealing their money through frauds and scams of any type.

We are concerned about the rationale recommended in proposed paragraph 52.2.(7)(b) for the “aggravating factors” to be considered in sentencing a person convicted of an offence under this clause. We assume that proposed paragraph 52.2.(7)(b) is age-related, especially to older persons.

Specifically, we believe that proposed paragraph 52.2(7)(b) must be reworded to take into account the following factors. Victims of this crime who are over the age of 65 and retired will not be able to replace money stolen from them and they will suffer dire consequences of that loss for the rest of their lives. As noted, they are especially vulnerable to misleading advertising, which is denigrating to them and may be hard to prove.

• 0930

Older age in itself does not make an individual more vulnerable to deceptive advertising. CARP recommends that the authority invested in Canada Post by Bill C-229 to refuse carrying a type of bill excluded by Bill C-438 should be specified in the latter bill as a message to communication and telecommunication companies that reminds them of their social responsibilities.

As currently written, this authority is implicit in Bill C-438. I might say at this point that this expectation is quite coincident with what Mr. Elliott has just been describing with respect to some of the difficulties experienced with Canada Post.

So in supporting Bill C-438, CARP is seeking to create the most effective deterrent against this kind of crime. It must be made perfectly clear that CARP is not advocating censorship of any kind, but precautionary measures. Communication companies like Canada Post and telecommunication companies that are chartered in Canada have a responsibility to ensure that their service is not abused and to protect our customers, including legitimate telemarketers.

Similarly, the Government of Canada has a responsibility to protect citizens from scams and frauds without impairing the business practices of legitimate telemarketers.

Thank you for your attention.

The Chair: Thank you very much, Mr. Calhoun.

We are now going to move to questions. Mr. Schmidt, please.

Mr. Werner Schmidt (Kelowna, Ref.): Thank you, Madam Chair.

Thank you, gentlemen, for appearing. It's been very interesting.

My first question has to do with the stopping enroute of the Priority Post. I'd like to ask you why it is that Canada Post doesn't do this. Is it a matter of policy, or is it a matter of legislation? I think those are two very different questions.

Detective S/Sgt Barry Elliott: It's my understanding that under the Canada Post Act, once mail comes into their possession it belongs to Canada Post and it shall be delivered. Once it's delivered it now belongs to whomever they send it to. In between you can't do anything to stop the mail or to intercept the mail. And the problem with Priority Post and express mail is that apparently it falls under the definition of what “mail” is as far as Canada Post is concerned. So they can't do the same thing that all the other courier companies can do and return the package to the sender as long as it hasn't been delivered.

Mr. Werner Schmidt: It's a matter of interpretation, because Canada Post also owns Purolator.

Detective S/Sgt Barry Elliott: And Purolator will return it.

Mr. Werner Schmidt: So that's really what this is, then. It's an interpretation of Priority Post vis-à-vis the Purolator courier service.

Detective S/Sgt Barry Elliott: The problem we have with Canada Post is they're absolutely hard to deal with. We can't get them to sit down at the table.

Mr. Werner Schmidt: That's a different issue.

Detective S/Sgt Barry Elliott: Is there room to manoeuvre within the existing legislation for them to say yes, we'll return it as a matter of policy? I can't answer that question.

Mr. Werner Schmidt: I appreciate that, and I'm glad you raised it here, because I was unaware of this. That's very significant.

The other question I have to ask is a rather far-reaching one. It has to do with looking forward and in particular the establishment recently by Canada Post of e-post, the electronic post office. And much of what you've talked about, of course, has to do with the old kind of stuff. Now we're moving into the electronic post office. Do you see the same kind of issue happening here? Are the mechanisms going to be different here? How does this bill, in your opinion, deal with the possibility of fraud committed under the electronic post provisions?

Detective S/Sgt Barry Elliott: A way to describe the Internet today is it's old wine in a new bottle. Basically, what we're seeing on the Internet are the same kinds of scams that we see through the mail and over the telephone. You have different contests being run. If you go to any website, they're trying to get you to enter contests, because it's a way of collecting—

Mr. Werner Schmidt: I know about the Internet thing.

Detective S/Sgt Barry Elliott: You're talking about e-mail.

Mr. Werner Schmidt: I'm talking about the electronic post, not e-mail.

• 0935

Detective S/Sgt Barry Elliott: I can't answer that. I don't know that area.

Mr. Werner Schmidt: That's a very unique situation, because apparently that's mail. It's exactly the same thing as mail except that it's electronic. So there's a difference in the way it's actually controlled.

Detective S/Sgt Barry Elliott: I'm sorry I can't answer that.

Mr. Werner Schmidt: Thanks.

Thank you, Madam Chair.

The Chair: Mr. Cannis, please.

Mr. John Cannis (Scarborough Centre, Lib.): Thank you, gentlemen, for certainly enlightening us on some of these issues.

I have a few questions. I have also heard some concerns and would like to find out how you would address them.

Mr. Elliott, you talked about the phone bill. If there's that charge on the phone bill of $20 or whatever, instructions to the phone provider not to pay that portion... What would happen if that portion of the phone bill, in your professional opinion, isn't paid and this deceptive marketing group decides to send it to a collection agency? I think they're within their rights, irrespective of the fact that they're committing some...

Detective S/Sgt Barry Elliott: We've found you have the right of a charge back. You have the right as a consumer to complain about a service that's being provided. So if you're not happy with this 900 service, and you complain, Bell Canada or another service provider will honour a charge back to your bill.

When they say a charge back it means that as long as you haven't paid that portion of your phone bill they'll remove it. If you've already paid that portion of your phone bill they won't go back in time to give you your money back. You're absolutely right. The responsibility now falls on this agency that if they want to collect their $24.95 they now have to either sue you or take it over to a collection agency and so on. We found that it's such a small amount of money it's not worth the trouble to go ahead and do that.

Mr. John Cannis: What happens if there's an accumulation of a larger sum of so many—the numbers you've given us of the 75,000 Canadians out of the 100,000, as an example? If you start multiplying that by twenty-some-odd dollars, it becomes a significant amount. They could come into an agreement with collection agency A. I personally haven't had the experience, but I've heard horror stories about how aggressive these agencies can get.

I'm just trying to imagine now what a senior in their fifties plus who has to go through and listen to an agent trying to collect this amount day in day out... As Mr. Calhoun mentioned, sometimes there's some vulnerability there.

Detective S/Sgt Barry Elliott: We've had some problems with collection agencies and we've taken some complaints that we've referred to other agencies on how to handle those. We haven't had a problem with these charge-backs. There has been a considerable number of charge-backs that have come through, specifically Bell Canada, in relation to certain mail-outs that we're aware of. There hasn't been any problem with service providers or collection agencies trying to collect these bills.

We have, however, seen other more significant unpaid bills through these different 900 calls and so on that haven't been paid where they've hired lawyers to send out nasty letters to collect the money.

Mr. John Cannis: So it's being done there.

Yesterday, when some of these presentations were passed around I noticed on some of them a list of prize winners. Bob Smith, such and such a town. Waterloo. You mentioned Kitchener. My first question is about whether or not these are real people. Do they really exist? Are there provisions, if they are not, to say “Not only are you committing fraud by deceptive games of chance, but you're also printing names of people who don't exist”? Has that been looked at at all?

Detective S/Sgt Barry Elliott: On one case we found that one person's name was being used without their permission, and they hadn't won anything. Even if there were people they gave prizes to, it doesn't take away from the fact that this was a deceptive card in the first place. Just because they gave out a few prizes doesn't make it an honest card to begin with.

So to answer your question, no, we haven't checked out all the prize winners to see if it's legitimate. We have had complaints from one alleged winner who didn't win anything.

Mr. John Cannis: It might not be a bad idea, if I may suggest to Mr. Calhoun, to notify Canadians across the country through your magazine if something like that does come to light. That's really what I'm driving at.

• 0940

I know yesterday, when I saw these cards, I said “Oh, gee, so-and-so won $10,000!” Immediately one of us might say “Well, I have an opportunity maybe to win this $10,000”, and pick up the phone. If you do come across these phoney names, maybe you could publish them and prompt people.

On the post side, if I may just comment, I understand what you're saying and I empathize with what you're saying, but sometimes I find it difficult to accept, listening to the presentation. If I call a courier company, whichever one it is, or if I put something in the mail that's in an envelope, how is that post office or that courier service to know what is in that envelope and the intent of that envelope?

Detective S/Sgt Barry Elliott: It's not that we're asking Canada Post to read the mail. All we're asking Canada Post to do is exactly the same thing all the other service providers are doing in the courier business.

If you send a package, you're paying the freight. Say it's costing you $10 to send your $10,000 money order to Montreal and you sent it this morning and you say to me, “Barry, I just sent $10,000. I think I've been scammed. What can I do?” If you told me you sent it by FedEx, I'd say, “Okay, you have your receipt. Here's the number to call. If they haven't delivered it yet, they'll send you your $10,000 back, and it will save you being victimized for $10,000.” It may be that you're 88 years old and it's the last $10,000 you have.

If it's Canada Post and they've picked it up with Priority Post, you're out of luck, because that money is going to be delivered to the criminal. Priority Post is the number one choice by criminal telemarketers out of Montreal, because they will deliver their product regardless.

Mr. John Cannis: Thank you, Madam Chair.

The Chair: Thank you, Mr. Cannis.

Before we move on, I wanted to clarify something. We had some discussion on Tuesday. In proposed subsection 52.2(1) it says “by mail or through any other system”. There's a problem right now with the Internet, according to the discussion on Tuesday, because it says “printed material”. A suggestion was made that that could possibly be amended to “written representation” to address that, so that the Internet would be covered as well. I'll just leave that out there for committee members for now.

I'm now going to move on to

[Translation]

Mr. Bernier, please.

[English]

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Thank you, Madam Chairman.

I like this committee. I should become a member. The reason I'm saying that is previously I think we had three bills that attempted to deal with this problem. We started with Madame Redman with Bill C-229. That bill was withdrawn, so that means there's no need to talk about that bill at all any more. Then she came forward with Bill C-438, which would stop persons who would want these cards to be distributed. So really it would stop the production of these cards; it would not stop the delivery of these cards. And yesterday I introduced in the House a private member's bill, Bill C-458, which would stop the production of these cards and stop the delivery of these cards.

As you said a while ago, it's hard to deal with Canada Post. We all know that. But to the credit of Canada Post, under the act—and I know the act pretty well—even if it's against the law to produce these cards, if it's not against the law to distribute them and if it meets the requirements Canada Post has set out under the act, they have an obligation under the act to distribute those cards. So really Canada Post would not be breaking the law. The ones who produced the cards would be breaking the law. But some people always try to do it just the same and not be caught by it. That would be the problem we would have.

If you look at Bill C-438, it says “cause to be delivered”. Now, “cause to be delivered” would be exactly producing those cards, but it would not stop delivering those cards. Would you agree with that comment?

Detective S/Sgt Barry Elliott: Well, no, because Canada Post has a moral and ethical obligation to act in the public interest as well, and that supersedes a lot of what's going on here. They also have a moral and ethical obligation, when they see there's a problem they're involved in, to do something about it. I am absolutely dumbfounded by the fact that Canada Post, who knows...

• 0945

I post my stats on the web at phonebusters.com. I have stats that show that the number one delivery of money obtained by fraud through telemarketing is delivered by Priority Post and express mail. It's out there. I've done a number of media interviews. I've tried to get Canada Post to do something about it. They are aware that they are the number one deliverer of money obtained by fraud through telemarketing, but they refuse to do anything about it. I am absolutely surprised. If I were running Canada Post, I'd be saying we should be doing something about this. What can we do?

I don't think you can hide behind the skirts of the Canada Post Corporation Act to say you can't do anything because you have the Canada Post Corporation Act that says you have to deliver the mail. That's like walking by a male adult raping a ten-year-old child on the street and doing nothing about it because, you know, I can't do anything about it. You have a moral and ethical obligation to do something.

Mr. Gilles Bernier: I agree with that comment 100%, but that's not what the act says of Canada Post.

Detective S/Sgt Barry Elliott: Again, they hide behind the skirts of the Canada Post Corporation Act. Why don't they change it? Why don't they make some amendments to the Canada Post Corporation Act? What does it take? Five minutes to write something up? We'll have a hearing in the fall and we'll make it law a year from now. I'm a patient man. I don't mind waiting a year to see something change in the act. It has been over five years since I brought this to their attention, and they have done absolutely nothing about it.

Mr. Gilles Bernier: It would take more than five minutes to amend an act.

Detective S/Sgt Barry Elliott: I'm just being facetious.

Mr. Gilles Bernier: In your position, is it hard to prosecute under the existing legislation?

Detective S/Sgt Barry Elliott: Yes, we have a real problem with a number of areas. The problem that you have with commercial fraud, with telemarketing fraud, with this kind of crime, is that it takes a lot of resources to put these packages together. You have victims across the country. It's a multi-jurisdictional crime. Where are you going to prosecute it? Are you going to fly victims to Toronto from Vancouver for a $25 loss in order to prosecute? At the end of the day, if you're successful in getting a prosecution, are you going to get the appropriate sentence and fines that are going to redress the situation? We run into a real problem with that under the Criminal Code. We think the Competition Act is the more appropriate place to lay the charges, because it's designed to handle this kind of problem.

Mr. Gilles Bernier: May I pose another small question?

The Chair: Sure, go ahead.

Mr. Gilles Bernier: Would you agree that it would be a lot better to outlaw—if I could use that word—the production of those keno cards, and also their distribution, to outlaw both and not just one of them?

Detective S/Sgt Barry Elliott: I suggested to Mrs. Redman that they invite a person from Bell Canada in Montreal, and that's the manager of 900 numbers. We've worked very closely with him over the last few years. If the telephone service providers knew they had the legislation behind them to not to give them a 900 number in the first place because the card is deceptive or it falls under the amended legislation of the Competition Act, that would probably solve the problem.

As long as the Competition Act has the strength and it's fairly clear in there what a deceptive card looks like, the 900 number probably wouldn't be given in the first place. And if you could get Canada Post somehow to cooperate and to work with us to help fight this crime, I'm sure there are things that could be amended under the Canada Post Corporation Act that would also be doubly there to protect consumers so that they don't end up with this stuff in their mail.

The Chair: Thank you very much, Mr. Bernier.

Just before we go on to the next witnesses, I have to apologize for something. We have people who have to leave the committee at 10 o'clock, and we have a motion that we need to take care of. I'm therefore going to ask our witnesses to just take a breather for a second.

Everyone has in front of them a budget submission page. If not, you'll be receiving one. With the consent of the committee, the numbers on it will change. Where it says two reports, $52,000, that will go down to $39,000 if everyone agrees that we don't do it in tumble format. The report we're preparing to do this week is very long. If we don't do it in tumble format, we can reduce the cost by about $7,000 for printing. We do have to do the second report on the Competition Act before the end of June, so this is just to ensure that we have a budget.

• 0950

The liaison committee will be meeting next week, so we're trying to ensure that the industry committee is out of the process.

Are there any other questions, or is everyone in agreement with that?

[Translation]

Mr. Bellehumeur.

Mr. Michel Bellehumeur (Berthier—Montcalm, BQ): You heard that I am not a regular member of this committee. I don't see the budget on the agenda despite the fact that I have a budget before me. I suppose we can proceed this way since we have quorum. However, I hope you understand that I object to this resolution and to the budget. If you submit it to a vote, I would like it to be a recorded vote.

[English]

The Chair: Sure, we'll have a recorded vote then.

Does somebody want to move the budget? Mr. Lastewka.

Mr. Walt Lastewka (St. Catharines, Lib.): Yes, I'll move the budget as revised.

(Motion agreed to: yeas 7; nays 2—See Minutes of Proceedings)

The Chair: Thank you very much.

Again, I want to apologize to our witnesses. We'll go back to questions now.

Ms. Redman.

Mrs. Karen Redman (Kitchener Centre, Lib.): Thank you very much, Madam Chair. I'd like to thank the witnesses for coming, and I apologize for my tardiness. I had a meeting.

I wanted to cover something off for minute, if I could. I would invite both the witnesses to respond, but I would first direct this to Mr. Elliott. It has to do with the international face of this whole issue and the fact that with technology people can be phoning either... Mail-outs can happen internationally. People can be reaching a number while not knowing whether it's down the street or across the globe.

I look at the unlawful mail act that was passed in 1994 in the U.S., and at the fact that it deals in a much more substantive way with infractions of the kind this bill is dealing with, more so than what we have in Canada. There's also the fact that President Clinton broached this subject with our Prime Minister in 1997. I'm wondering if you could just talk for a minute about the fact that these crimes don't know geographic borders.

Detective S/Sgt Barry Elliott: Yes, we've had a huge problem. It's kind of an oxymoron in one sense. We've had huge success in Canada in terms of educating the Canadian public to be more aware of fraudulent telemarketing and fraudulent mail-outs. We have seen about a 75% reduction in the number of reported victims from 1995 to now. Without a doubt, the Canadian public is becoming much more aware of fraudulent telemarketing and it's getting harder to do here. Now, I'm not saying that it's not still a serious problem, because it very much is a serious problem.

As a result of the reduction in the number of victims and the amount of money the criminals can make here, these guys didn't wait around. They started to move into the American market heavily in 1995, and 50% of all the victims that we get at PhoneBusters today will be American victims. We have victims as far away as New Zealand, Australia, and Nigeria.

There is a mail-out that's going out now called Canadian Equity Funding—there has been a search warrant on the account—that gets people to enter a contest. It has gone worldwide. It is being mailed out to English-speaking people worldwide. We believe they're now presently not creating sucker lists just for the country of Canada, they're creating sucker lists for the world. We have probing going on in telemarketing that is targeting New Zealand and Australia. We have ads going into newspapers for loan scams in Australia and New Zealand. And U.S. dollars are being sent to Canada under the illusion that they're getting a loan.

All kinds of sophisticated stuff is happening, and criminal Canadians are unfortunately on the leading edge of this technology as far as mail scams, Internet scams, and telephone scams are concerned, to the point where it has really been a thorn in the side of the United States. They see aggressive criminal telemarketing going on in Montreal, Toronto, and Vancouver. It's targeting seniors and other members of the public in the United States, while we don't have aggressive action here in Canada that is targeting them criminally for prosecution.

• 0955

We are still waiting for a national plan to be put into place. I know the RCMP have gotten some extra money in their budget. They're still trying to figure out where they're going to spend it. Hopefully—and I know it's been identified as a key area for them—they'll target some of this money into a national plan and support the strategy that's been put in place on the cross-border fraud report that was produced in 1997, as Karen Redman alluded to.

I hope they finish off what we've started, because it will be very successful, and it will allow us to go out and try to work with other countries to clean up what really is a Canadian mess.

The Chair: Karen.

Mrs. Karen Redman: Thank you. If I could, I'd like to direct a question to Mr. Calhoun.

Could you speak for a moment about how you believe these cards impact your membership? Do you believe that the thrust of Bill C-438 will protect or assist seniors?

Mr. Rolf Calhoun: With respect to the question of how it impacts on members, it's my understanding that these kinds of frauds affect not only CARP members, obviously, but any Canadian in the country who may be a recipient of such an invitation to put money into the hands of the fraudsters.

How it affects people is that they're losing money in the period of life when they often have little or no current income. Consequently, money they may lose at that point in their lifetimes is irreplaceable and can affect them for the balance of their lives. This is a serious problem, obviously, for those who are in a state of retirement, or near retirement. That's how I would say our members are primarily affected—but it's not limited to members, of course.

Detective S/Sgt Barry Elliott: May I just add to that?

I've been doing this for many years, and I'd just like to share with you that this kind of crime against seniors is a very emotional, violent crime. It has destroyed a lot of people's lives, a lot of marriages, a lot of families. I can't explain to you some of the horror stories we've gotten in our office. It's terrible what can happen over the phone. People are so embarrassed by it, they don't even want to call the police. They don't want to tell their spouses about it.

I just want to reiterate that story—and we've had things happen here in Canada—where that woman in California lost $66,000 to a Canadian fraudulent telemarketer. She was so embarrassed about having to tell her husband what had happened, she committed suicide. That isn't the first time. This is a very violent crime. It attacks the very heart of our society, and there should be a lot more done about it.

The Chair: Thank you, Mrs. Redman.

[Translation]

Mr. Bellehumeur.

Mr. Michel Bellehumeur: I would like to begin by thanking the witnesses for coming.

I don't have many questions since I feel that everyone around the table agrees on the purpose of the bill. However, I have a question on a legal matter for Mr. Elliott. I don't know if you will be able to answer.

When I read Bill C-438, I questioned its wording. My question is very simple. Mr. Elliott, do you believe the bill is clear enough to permit prosecution against criminals in court?

Take section 1 of the bill, for instance. I have read it at least ten times but I'm still not sure I understand it. The wording is very complicated. Yet it is an extremely important section.

• 1000

Section 2 amends subsection 52.2 of the Act. In the new subsection 52.2, expressions such as "any business interest" and "that conveys the general impression" are used. My background is in law and I believe there is a principle whereby the Crown must prove its case beyond a reasonable doubt. Do you believe that given the wording before us, a crown prosecutor would be able to prove that the offence had been committed beyond a reasonable doubt?

[English]

Detective S/Sgt Barry Elliott: I can't really answer your question, because you're right, I'm not in a position to respond to the technicality of the wording of the legislation.

It's my understanding as well that there's been some discussion about trying to include this under the Competition Act, in some amendments in the Competition Act. I think, in fairness, if this bill is adopted in some form in collaboration with the Competition Act—and I'm not sure if there's going to be some collaboration with the Canada Post Corporation Act or not, so I'm not sure exactly where this is going—as long as something comes out of this that gives us the ability to clearly demonstrate where we stand today as far as these scratch-and-win tickets are concerned, I think we would be satisfied.

As far as the ability to prosecute is concerned, the wording and everything else, that would be up to a legislator or lawyer to respond to that.

[Translation]

Mr. Michel Bellehumeur: That's fine.

The Chair: Thank you, Mr. Bellehumeur.

[English]

I have Mr. Lastewka.

Mr. Walt Lastewka: Thank you very much, Madam Chair.

First of all, Mr. Elliott, I'd like to congratulate you on your hard work on this subject over the past number of years. We did a taping together last Christmas that went over very well in the Niagara area. I think it was played something like 25 times over the season. Still, people fell into taking a chance.

We're trying to get at the delivery of these products and so forth. Should we not be moving it back to saying that just like there's legal and illegal marketing, there is legal and illegal gaming? Should we not be taking it right back to that?

Detective S/Sgt Barry Elliott: Well, I think there's been a lot of work that's already been done in fighting telemarketing fraud and mail-outs. I think two key areas are really important: that there is strong collaboration between the Competition Act, Industry Canada, as well as Canada Post, in working together with and/or mending the existing legislation. So those two key areas, along with the telephone service providers, can nip this in the bud before it even gets out on the street.

I think as long as these things can't get out, and as long as people have the ability to say no, we can't lawfully give you this 900 number because it's clearly against the legislation in the Competition Act or Canada Post, that's where we should be going. I don't think we should be making something brand new. I think we should be building on what we already have.

Mr. Walt Lastewka: So basically what you're saying is the Bells and Teluses of the world who give out these numbers should know exactly what they're going to be used for and should be taking more caution at that time?

Detective S/Sgt Barry Elliott: To give you an example of the relationship we have—and again, you'll be able to ask the gentlemen from Bell Canada these specific questions—there are certain instances when they would have liked to have said no, but they couldn't. They were at civil liability to say no, because there wasn't anything clear that they could say no about. In fairness to these companies—if you want to be fair to these companies—in some cases some people would say we can't do anything until there's a registered conviction in court.

For example, the telephone service providers will not shut down a phone line, because they take the view... If you look at the CRTC, they have the power to shut your phone line down if there are harassing, abusive, and abrasive calls, and if it's contrary to criminal law.

• 1005

Now, what does “contrary to criminal law” mean to a bunch of telephone lawyers? What they say is that it has to be a registered conviction in court, which doesn't do anybody any good because by the time you get around to getting a conviction it's two or three years down the road and you don't need them to shut down the phone line because it's already been closed.

What they're looking for, and what they found when the got the conviction on Cave Promotions last year, which was the first and only conviction that's ever been registered against a 900 number scratch-and-win card... That gave them the ability to say no, because under that judgment they could say that this, for example, would fall under that, and they could say no. They could say, we're not going to give you a 900 number because we don't want to be at civil liability by our consumers by giving it to you in the first place when it's obviously illegal.

The banks, who work with us on a regular basis, are really unsung heroes. If we can associate a fraudulent merchant account taking credit cards to telemarketing fraud, the banks will shut it down, just based on consumer complaint. It gives them reasonable probably grounds to believe that their customers are being defrauded. They shut it down, and it also saves them some money. They'll go as far as shutting down your chequing account just based on consumer complaint data that the account is being used to cash money orders that are obtained through fraudulent telemarketing—without having any convictions.

I think the service providers would be able to do a lot more if you gave them the tools to do it with and if it is really clearly spelled out in the Competition Act or in Canada Post.

The Chair: Thank you very much, Mr. Lastewka.

Mr. Penson, please.

Mr. Charlie Penson (Peace River, Ref.): Thank you, witnesses, for being here today. This is an interesting topic, one that I'm not just sure where it should go yet. I'm looking forward to other witnesses coming to talk about this too.

I do have a concern, though. I certainly understand the concern that is being raised in this bill, but I also have concerns in the other direction, that is, how far government can go in regulating and legislating people against themselves.

Mr. Elliott, you talked about how destructive this is, and it certainly sounds like that, but we know that gambling, drinking, and smoking can be very destructive, and they also affect other people in society besides those directly affected. That's the kind of line that people walk all the time.

I remember working as a high-school student in a Canada Safeway store where groceries were being sold. There were the same brands, one that said “everyday low prices”, on display. Down the aisle a little way was the exact same product, and people bought the one that said “everyday low prices” three to one over the other product. Where is the line where we can sort of legislate against some common sense?

Just to go a little further with it, it seems to me that maybe the answer that might be available is one you've already described to some extent, where it's a public awareness program. You've said that it has been effective to a large degree already, but I don't think we're ever going to be able to legislate that nobody is going to make bad decisions in their lives.

As Mr. Calhoun said, it doesn't just affect seniors. People make bad decisions all the time. We make choices. I'm a little concerned about the unintended consequences of regulating too much as well.

Detective S/Sgt Barry Elliott: I think the way to respond to this is in the way the competition amendments were originally designed in the first place.

Rolf and I were both involved in the discussions and eventual new legislation regarding telemarketing. We brought in the private sector, the public, all the interested parties that were affected by this legislation, and we all worked together to develop something that was exactly in the direction you talked about so that everybody would be relatively happy with it. That piece of legislation went through extremely smoothly and everybody was quite happy with it. There are only a few little problems with it. There are little loopholes that have to be amended, such as the live-voice issue and so on and so forth. I think it was done in a very fair way that didn't over-legislate the public.

Going back to your question about common sense, I don't have any problem with... If somebody wants to make the decision to go down to the Elephant & Castle and have a beer, that's fine. If somebody wants to go down to Hull and make a bet, that's fine. They're walking into the Hull casino to make a bet. But if the owners of the Hull casino are running a cheating horse-racing machine that's designed to deceive the public and rip them off, I have a problem with that. And if the Elephant & Castle is giving you food or beer that may be injurious to your health in the sense that it's not a good product and they're doing it on purpose, I have a problem with that.

• 1010

I agree with the fact that you have to have free choice, but I think we have a duty to stop people from conning other people based on lies, deception, deceit, and dishonesty.

I think Canada Post, the telephone companies, the police, everybody involved has a duty to try to protect seniors—if they feel they're the primary target because they have all the money—from a scam that's being perpetrated on them across this country and causing some people to lose their life savings. We're not talking about stupid, greedy people who should know better. We're talking about people who have money and who have been very successful in life and who are getting conned by professional con artists and are sending their money willingly under the illusion that they've won a great deal of money.

I think it's a moral issue. And I also don't believe in over-legislating.

Mr. Charlie Penson: But the type of activity you've described with the card you have there, is that presently illegal in Canada?

Detective S/Sgt Barry Elliott: There is already a conviction registered under the Competition Act against Slots of Gold, which was a deceptive card. This card is under investigation as well, but there hasn't been a conviction against this card. I can tell you that I feel it's a deceptive, dishonest card, but there's no registered conviction against it. It's now out of business. Does that answer your question?

Mr. Charlie Penson: Yes. Just a little bit further to that, what I'm suggesting is that you might control one but then a new one springs up, and it just keeps going. That's why I'm suggesting that a public awareness program is probably a better approach, because these things keep evolving. As we know, we have the Internet now, and there's a big discussion on how much regulation that should have. So I'm not sure that you can ever keep ahead of it. It seems to me that a public awareness program would be far better.

Detective S/Sgt Barry Elliott: When I first started PhoneBusters, I agreed heavily that the right approach was to kick the door in, arrest somebody, drag them down to a courthouse, get them convicted, and put them in jail. Today I can tell you that I agree strongly with community-based policing. It is effectively the way to go, educating the public to be aware of it in the first place. But you just can't put all your eggs in one basket. You have to have a public education approach, a strong partnership to stop and obstruct the ability of these things to operate, and a tactical approach where you're going after them any way you can, whether it's the Competition Act, civilly, under the Criminal Code, whatever. You have to have a multi-pronged approach. You can't just rely on one thing.

The Chair: Thank you very much, Mr. Penson.

I'm sorry, Mr. Calhoun. Do you have something to add?

Mr. Rolf Calhoun: If I may respond also to your question, I think you're raising an interesting point, which is a valid point deserving of attention. However, consistent with what Mr. Elliott is saying, I believe also that there is a responsibility for government in this case to protect people against real crime. People make millions, and they make millions because they are in fact engaging in criminal activity. The people who lose millions suffer real serious harm as a result of this kind of activity. When those who make the money eventually are convicted—and they are convicted—they go to jail for long periods of time.

In Canada we are aware that apparently there has been a specialty among Canadians in recent years to in fact run their shops in Canada and to target not only Canadians but also people outside the borders of Canada.

Some years ago I met one of these individuals who was at the time resident in Barbados and running his business in part from Barbados but with a number of other installations, if you will, not only in Canada but also in the United States. He was running a very big business, and he was making very big money. He was ultimately convicted, and he has now taken up residence in a federal institution.

So in my opinion, it's not enough to rely only on public awareness in this kind of situation. This is real crime, and it calls for real remedies to be taken by government.

Thank you.

The Chair: Thank you.

Mr. McTeague.

• 1015

Mr. Dan McTeague (Pickering—Ajax—Uxbridge, Lib.): Thank you, Madam Chair.

Thank you, gentlemen, for being here today.

Sergeant Elliott, it's good to see you again. It has been about three or four years since you and I had a discussion. You were in a little cubbyhole somewhere up in North Bay, and you were lamenting the fact that you had very few resources. But I want to thank you. Several years ago we were able to put together a ten percenter. We sent it out to a lot of members, and I think we struck fire in that in terms of being able to communicate with constituents. You were particularly helpful with an individual who was subjected to a scam in my former riding of South Ajax, and I want to thank you for that. It's good to see that over the years some progress has been made.

Thank goodness my colleague Karen Redman has been patient and has been able to find an alternative with the Competition Act. It's on that I really wanted to base my question. I agree in part with what Mr. Bellehumeur has said concerning the rather—I don't want to use the word “obtuse”—difficult legal language in Bill C-438 at the beginning, and I'm not so sure we're going to be successful in getting a prosecution or being able at least to provide a modicum of deterrence to those individuals.

You talked about the real issue being the Canada Post Corporation Act, which the sponsoring member had quite rightly pointed out and identified at the beginning. I'm wondering if you could be free to say whether you believe these changes to the Competition Act will be sufficient in your mind or if this is a second-best that might get some of it but not all of it in terms of addressing and tackling this problem beyond the parameters of public awareness and the project, which has been very successful, about people hanging up and other initiatives you and other members have taken in the past.

Detective S/Sgt Barry Elliott: Generally speaking, we're fairly satisfied with the new amendments to the Competition Act, except for some of the loopholes we've identified as far as a live voice is concerned.

This new legislation really hasn't been around long enough. It really hasn't been tested yet criminally speaking, and we haven't really seen any decisions come out of this new legislation.

Some of the things that really concern me are sentencing guidelines and that especially under the Competition Act they will levy a heavy fine, but the poor victims won't see one dime of that fine. As far as I'm concerned, that's not fair. Why wouldn't at least part or most of that money go toward redressing all the victims at least partially? I'd like to see that amended.

With regard to the sentencing guidelines, I think it's quite clear that in this country we need to look at sentencing guidelines for not only the Competition Act but also the Criminal Code, perhaps something similar to what they have in the United States. I'm not suggesting the same type of sentencing, but we have to have something set up whereby the criminal knows, the judge knows, and the police know what's going to happen to you if you get convicted of this specific offence, which you've committed for the second, third, or fourth time.

They have a terrific system down there where it's like a big book. If you've committed your second break and enter involving so much money, they go to this book where they have plus and minus points for your cooperation and so on and so forth, and they come up with a number. The judge looks at that number and the sentencing guideline specific to it, and he is limited to giving this guy a minimum and a maximum. For example, in this particular case—and I was involved in one with telemarketing—he would have to give that person not less than a year and not more than 18 months. The judge's only movement for the sentencing was between a year and 18 months. I think where we have to go is in that direction.

Mr. Dan McTeague: The bill addresses the mechanism by which the product is delivered, as opposed to those you've been combatting in the past, and that's those who are the actual purveyors of the product. In your mind, is this an important step in terms of being able to arrest the problem before it hits individuals?

I'm looking at the offences part of this, and it looks a lot like a summary hybrid with very little in the way of indictable. So I'm not so sure it sends the right message to those who knowingly engage in, as you've suggested, Priority Post. We have a number of other competition problems with Priority Post, but that's for another time.

• 1020

Detective S/Sgt Barry Elliott: In fairness, I'm not an expert on this legislation; I don't know it that well. My understanding is that they're working very closely with sort of blending this into the Competition Act. Of course I don't lay charges under the Competition Act because that's under Industry Canada's enforcement, but we work very closely with Industry Canada and feed them a lot of information they use for their search warrants, and so on. It's important to us that it's a strong act.

We rely on that act heavily, so whatever comes out of this—and I agree with you—there has to be appropriate sentencing and it has to be clear. If it ultimately ends up in that direction at the end of the day, we will be very happy.

Going back to your other comment, there's no one way to fight a fraudulent telemarketer. We are not limited to just one way of fighting. If there's any way we can get people and corporations involved in helping us proactively fight these guys, we're more than willing to take that opportunity.

Mr. Dan McTeague: Thank you for what you've done.

Madam Chair, those are all my questions.

The Chair: Thank you very much, Mr. McTeague.

Mr. Bellemare?

I don't have any other questions on my list—unless anyone has any more. Do you have any more questions, Mr. Penson? No?

Mr. Calhoun, Mr. Elliott, do you have anything final to add to the committee, any words of wisdom for us before we part?

Detective S/Sgt Barry Elliott: I think I've made every shot I could possibly get in.

The Chair: We're just having discussions on what other witnesses we will now have to call. We thought we had our list all done for next week, but you both have added a couple of issues to the table, and we appreciate that. We appreciate you taking the time in your presentations, and we look forward to our next meeting with you.

We anticipate that either Ms. Redman's bill or Mr. Bernier's bill will be back at this committee at some time, and we will appreciate your appearance then as well.

Thank you very much.

I remind committee members they'll be receiving the draft report, hopefully, in their offices tomorrow.

The meeting is now adjourned.