Testimonials (Competition Act s. 74.02)

The Act does not define “testimonial”; s. 74.02 covers a testimonial with respect to a product. A buyer may want to check any franchisee quotes in a franchisor’s recruitment material against it. Section 74.02 of the federal Competition Act sets conditions for publishing them. See what a franchisor must disclose before you sign.

What s. 74.02 requires

The section applies to a person who, for the purpose of promoting, directly or indirectly, the supply or use of any product or any business interest, publishes a testimonial with respect to a product. That person engages in reviewable conduct unless it can establish that the testimonial was previously made or published by the person who gave it, or that the person who gave it approved it, and gave permission in writing to publish it, before it was published. The testimonial must also accord with the one previously made, published or approved. The section covers representations that a test has been made, too.

Consequences and what to ask

The Competition Bureau lists s. 74.02 among the civil provisions: the court may order the person to stop the conduct, publish a corrective notice, or pay an administrative monetary penalty. Under s. 74.1(3) of the Act, no notice or penalty order may be made if the person establishes that it exercised due diligence to prevent the conduct. See reviewable conduct. A buyer can ask:

• Who gave each testimonial in the sales material, and whether written permission is on file
• Whether each quotation still accords with what that person said
• Whether any complaint or inquiry has been made about the testimonials