Thank you, Madam Chair, for the invitation to speak to you today about identity theft.
My name is Morgan Currie and I am an assistant deputy commissioner in the fair business practices branch, which is an enforcement branch of the Competition Bureau part of Industry Canada.
I am accompanied by my colleague, Mr. Thomas Steen, major case director and strategic policy adviser in the fair business practices branch. Mr. Steen established and is responsible for overseeing the bureau's enforcement regime to counter mass marketing fraud, or MMF, which we're here to discuss today. We're also very pleased to be here today with our partner, the Royal Canadian Mounted Police, which is represented by Superintendent Cormier and Inspector Miller.
I will begin my remarks by describing the mandate and role of the Competition Bureau. Then I will discuss our enforcement work to combat mass marketing fraud. Finally, I will touch upon partnerships that the bureau is involved in that help strengthen enforcement initiatives in the area of mass marketing fraud.
The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace. Headed by the Commissioner of Competition, the bureau is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act (except as it relates to food), the Textile Labelling Act and the Precious Metals Marking Act.
The basic operating assumption of the Competition Bureau is that competition is good for both businesses and consumers.
The bureau will also be responsible for enforcing parts of Canada's anti-spam legislation when that law comes into force on July 1, 2014, together with the Canadian Radio-television and Telecommunications Commission and the Office of the Privacy Commissioner. Through this legislation the bureau will be able to more effectively address false or misleading representations and deceptive marketing practices in the electronic marketplace, including false or misleading sender or subject matter information, electronic messages, and locator information such as URLs and metadata.
The bureau promotes truth in advertising in the marketplace by discouraging deceptive business practices and by encouraging the provision of sufficient information to enable informed consumer choice. False or misleading representations and deceptive marketing practices can have serious economic consequences for Canadians, especially when directed towards large audiences or when they take place over a long period of time. They can affect both consumers and businesses that are engaging in honest promotional efforts.
The Competition Act contains criminal and civil provisions to address false or misleading representations and deceptive marketing practices in promoting the supply or use of a product or any business interest. Under the criminal provisions, the general provision prohibits all materially false or misleading representations made knowingly or recklessly. Other provisions specifically prohibit deceptive telemarketing, deceptive notices of winning a prize, double ticketing, and schemes of pyramid selling.
Identify theft, as the RCMP has described it, refers to the preparatory stage of acquiring and collecting someone else's personal information for criminal purposes. There are several Criminal Code provisions that address fraudulent conduct. The Competition Bureau's mandate in the mass marketing fraud realm relates to conduct that affects competition and to ensuring consumers have the information required to make informed purchasing decisions. Offences such as identity theft and frauds where no product or business interest are promoted do not fall under the bureau's mandate.
Mass marketing fraud is fraud committed via mass communication media using the Internet, the mail, or the telephone. Costing the Canadian economy $10 billion per year, it is an increasingly global criminal threat.
It has a substantial negative effect on economies and markets by undermining consumer trust and confidence in legitimate businesses. Large-scale criminal mass marketing fraud operations are present in Canada and other countries around the world.
Operators of mass marketing fraud schemes are highly adaptive, rapidly changing their methods and techniques to reduce the risks of law enforcement detection and investigation and to respond to consumer and business awareness of their current methods.
Identity theft and money laundering continue to be critical components of various mass marketing fraud schemes. Law enforcement agencies are witnessing an increasing exploitation of fraud victims to receive and launder victim funds or to receive and disburse counterfeit financial instruments. While most mass marketing fraud schemes are non-violent in nature, law enforcement intelligence indicates that some groups that engage in fraud employ threats and coercive tactics against uncooperative victims, rival groups, and their own group members.
The bureau often investigates large-scale mass marketing fraud crimes which have resulted in consumer losses of up to $500 million. The types of MMF cases that the bureau investigates include: scams targeting small and medium-sized businesses, such as directory and office supply scams; digital economy cases in which important information is buried in the terms and conditions; job opportunity scams; and health-related scams.
To effectively counter the threat of mass marketing fraud, investigative law enforcement and regulatory authorities in multiple countries have been: working together to gather and share intelligence on MMF schemes and how to disrupt them; increasing public awareness and education programs to help individuals and businesses recognize these schemes and avoid losses; developing measures to more promptly identify and support victims of mass marketing fraud schemes; and developing and expanding coordinated efforts among law enforcement agencies to fight MMF schemes.
To illustrate our collaboration, the bureau is a member of the International Mass-Marketing Fraud Working Group and the International Consumer Protection and Enforcement Network.
The bureau also plays a central role in the seven MMF Canada-U.S. law enforcement partnerships across the country of which the bureau is a founding member. Established in the 1990s to combat deceptive telemarketing, these partnerships now include Canadian and U.S. law enforcement agencies that work together to enforce laws dealing with mass marketing fraud. This collaboration has resulted in hundreds of investigations, prosecutions, and convictions.
The Canadian Anti-Fraud Centre, which the bureau jointly manages along with the RCMP and the Ontario Provincial Police, is the hub of the national network of MMF partnerships. It provides intelligence and complainant information to law enforcement partners on a wide range of MMF crimes.
In addition, the CAFC, along with the bureau and the bureau's law enforcement and private sector partners, educates consumers on how to recognize, report, and stop various forms of MMF. In fact, the partners collectively promote fraud awareness during fraud prevention month, which takes place in March.
In conclusion, Madam Chair and members of the committee, I would like to thank you for the opportunity to be here today and to speak about the work the bureau is doing to combat mass marketing fraud. We recognize that this is a global problem and accordingly one that requires a coordinated approach. The bureau will continue to work together with law enforcement agencies across the globe to defend consumers against this threat.
Thank you. We look forward to your questions.