Hello? It’s not just e-mail . . .

Lisa R. Lifshitz
As Canadian and foreign companies that do business in Canada continue to struggle with the complexities of Canda’s Anti-Spam Legislation compliance, some organizations are tempted to just reach for their phones instead and do some old-fashioned “cold calling,” believing themselves immune from legal censure.

However, they do so at their peril, because the same organization overseeing the enforcement of CASL, the Canadian Radio-television and Telecommunications Commission, also enforces rules against “unsolicited telecommunications,” specifically telemarketing phone calls targeting consumers for the purpose of selling or promoting products and services.

In Canada, telemarketers must comply with the Telecommunications Act and the Unsolicited Telecommunications Rules, which consist of the National Do Not Call List Rules and Telemarketing Rules. And unlike CASL, which has been the subject of very few notices of violations to date, the CRTC appears to be actively enforcing the Unsolicited Telecommunications Rules, and levying fines with rigour.

Most recently, on March 10, the CRTC issued notices of violation to three Canadian-based companies and two Indian-based call centres with penalties totaling $643,500.

The notices allege the five companies failed to respect the Unsolicited Telecommunications Rules, failed to have valid registrations with the National DNCL Operator or purchase a subscription to the list, failed to provide appropriate information in a clear manner, and did not display the originating telephone number or an alternate telephone number where the telemarketer could be reached.

Even worse, these anti-virus software telemarketers allegedly falsely identified themselves as representatives of Microsoft Inc., the U.S. Department of Homeland Security, or officials from the Canadian government and tried to gain remote access to home computers under the pretext of removing viruses and other malicious software.

The Canadian companies have 30 days to either pay the penalty or file representations to the CRTC. (Click here for more information).

If past practice is any guidance, 2016 will see even more of this activity from the CRTC. In 2015, the CRTC’s notices of violation page described more than 20 organizations that had to pay penalties for failing to comply with the Unsolicited Telecommunications Rules.

So what do telemarketers have to do to meet these requirements?

The rules include (i) the National Do Not Call List Rules; (ii) the Telemarketing Rules and the Automatic Dialing-Announcing Device Rules. I will discuss the first two sets of rules.

The National Do Not Call List Rules

If a company plans to engage in “telemarketing,” it must, prior to making any telemarketing calls, (i) subscribe to the National Do Not Call List (a list of telephone numbers of consumers who have chosen to register their numbers on the National DNCL in an effort to reduce unsolicited telecommunications); and (ii) pay all applicable fees to the National DNCL operator (the person who has delegated powers from the CRTC to administer databases, administrative, or operational systems).

The telemarketer cannot call phone numbers that are on the DNCL, unless the company has express consent or has an existing business relationship with the proposed customer (sounds familiar, doesn’t it?).

Express consent can be provided through: (i) written consent signed by the consumer; (ii) oral consent (as long as it can be verified by an independent third party or an audio recording of the consent retained by the company); (iii) electronic consent through the use of a toll-free number; (iv) electronic consent via the Internet; or (v) consent through other methods so long as there is a documented record of the consumer’s consent created by the consumer or an independent third party.

A telemarketer can also call an individual whose phone number is on the DNCL if the telemarketer has an existing business relationship with this individual, and this individual is not listed in the company’s own do not call list. An organization is considered to have an “existing business relationship” with an individual if this individual has:

o    Purchased, leased, or rented a product or service from the company some time within the previous 18 months before the call;
o    Has any written contract with the company still in effect or expired some time within the last 18 months before the call; and/or
o    Has inquired or made an application to the company about a product or service some time within the six months before the call (I told you that this really sounds familiar).

Like CASL, a consumer can withdraw his or her express consent at any time by advising the company either in written, oral, or electronic form. The onus is always on the company to prove the consumer provided valid express consent. Once the “existing business relationship” time periods have passed, the telemarketer cannot call the individual if his or her number is on the DNCL, unless this individual has given express consent.

Telemarketers that seek to comply with the National DNCL Rules must keep proof of their subscription to the DNCL and proof of payment to the DNCL operator for a period of three years from the date the record is created.

They must also keep records relating to express consent and sufficient proof (including beginning and end dates) of existing business relationships. Telemarketers can only use the National DNCL to comply with applicable statutes, such as the Unsolicited Telecommunications Rules, including the National DNCL Rules and Telemarketing Rules, and the Telecommunications Act and cannot sell, rent, lease, publish, or disclose the National DNCL.

Organizations must ensure they use updated versions of the DNCL — obtained from the DNCL operator no more than 31 days prior to the date of the telemarketing phone call.

Lastly, it is worth noting that if an organization engages a third-party telemarketer to conduct activities on its behalf, it can be vicariously liable for the violations conducted by the telemarketer.

Telemarketing Rules

In addition to the National DNCL Rules, organizations should be aware that they also have to comply with the Telemarketing Rules regardless of whether the telemarketing communication is exempt from the National DNCL Rules.

Telemarketers must further: (i) register with the National DNCL operator; (ii) provide certain information to the DNCL operator as requested; and (iii) pay the applicable fees charged by the complaints investigator delegate (the person who has delegated powers from the CRTC to investigate violations of the National DNCL Rules).

The fees vary depending on the number of area codes and the monthly period chosen by the telemarketer.

Similar to the above, any prospective telemarketer must keep detailed records for three years from the date that the records are created as proof of the telemarketer’s registration with the DNCL operator and the payment of fees made to the complaints investigator delegate.

While organizations may have heard of the national DNCL, many don’t realize they have an entirely separate legal obligation to maintain their own internal do not call list. 

This list must include the names and phone numbers of consumers that asked not to receive any subsequent phone calls from the organization. The organization must process and give effect to the consumer’s request at the time of the phone call and then add the consumer’s name and number to the company’s own internal do not call list within 14 days of the request.

The organization must keep a consumer’s name and phone number on the list for three years and 14 days from the date of the request. Organizations are strictly prohibited from calling consumers who are (or should be) on their internal do not call lists and must ensure they use current versions of their lists — updated no more than 31 days prior to the date of the telemarketing call.

The Telemarketing Rules also prescribe detailed codes of conduct. For example, when making a telemarketing call, the telemarketer must provide the company name and the name (or fictitious name) of the company’s employee making the phone call in a clear manner to the call recipient.

If requested, the telemarketer must provide (i) a phone number the consumer can use to access an employee or other representative of the company to ask questions, to make comments about the phone call, or to make or verify a request to be placed on the company’s internal do not call list; and (ii) a name and e-mail address or a postal mailing address that the consumer can use to write to an employee or other representative of the company to ask questions, to make comments about the phone call, or to make or verify a request to be placed on the company’s internal do not call list.

The phone number provided to the consumer must be local or toll-free and must be answered either by a live operator or by a system that takes messages. The voicemail system’s message must inform the consumer that his or her call will be returned within three business days and the company must return the call  within three business days.

The company must ensure the e-mail addresses, postal mailing addresses, and local or toll-free phone numbers provided to a consumer are valid for a minimum of 60 days after the telemarketing phone call was made.

Telemarketers are also restricted to making calls during certain hours: (i) 9 a.m. – 9:30 p.m. local time of the recipient Monday to Friday; and (ii) 10 a.m. to 6 p.m. on Saturday and Sunday.

Random dialing is permitted, except to phone numbers registered on the National DNCL, emergency lines associated with health-care facilities, and on the company’s own internal do not call list.

Telemarketers are expected to keep written records of their compliance activities regarding the Unsolicited Telecommunications Rules in the same manner and format as they keep their other records in the regular course of business (i.e., in their regular place of business, and readily accessible). If requested, the telemarketer must provide its records to the CRTC within 30 days of such request.

Failure to comply with the CRTC’s Unsolicited Telecommunications Rules can be costly. Individuals that have been found to contravene these rules are subject to fines of up to $1,500 per violation, while corporations are subject to fines of up to $15,000 per violation.

So, the next time a client intends to pick up the phone and call consumers on an unsolicited basis in an effort to “keep things simple” and avoid CASL, tell them to think twice and remind them of their telemarketing obligations — it’s the prudent thing to do.

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