This brief summarizes the recent Canadian Radio-television and Telecommunications Commission (the "CRTC" or the "Commission") decision establishing a framework for unsolicited telemarketing calls and other unsolicited telecommunications received by consumers (the "Decision").1 The Decision creates a National Do Not Call List ("National DNCL") as well as rules regarding telemarketing and automatic dialing-answering devices (collectively, the Unsolicited Telecommunications Rules ("UTR")). While each telemarketer currently has a "do-not-call list", the new system will allow consumers to register for only one list.2 Consumers will have the responsibility of registering telephone or fax numbers on the system and once registered all subscribing telemarketers must not solicit that number for a period of three years, at which point the consumer will have the responsibility of re-registering the number with the National DNCL.
I: National Do Not Call List
Application and Exemption
The National DNCL will be a nationwide registry that will "allow consumers to reduce the number of unsolicited telemarketing calls they receive. Telemarketers will be prohibited from placing unsolicited telemarketing calls to telephone numbers that are registered on the DNCL."3 The National DNCL will allow consumers to register any Canadian telephone number on the list, including a land line, cellular telephone or fax machine. However, not all telecommunications will be subject to the National DNCL, and these include telecommunications made in respect of charities, pollsters, political parties and newspapers. The National DNCL will not apply to business to business consumer calls, or in respect of a situation where there is an existing business relationship with the consumer.
Operation of the National DNCL
A third party operator will operate the National DNCL. The system will be funded by the required subscription to be paid by all telemarketers, except those explicitly excluded from the National DNCL. A public notice of intent to solicit bids from independent operators to operate the system will be issued within the next month or so (July, 2007). The National DNCL will commence when an operator has been selected.
Pursuant to section 41 of the Telecommunications Act, the Commission will delegate the following responsibilities to the independent operator:
- administration of database and system;
- collecting complaints from consumers regarding allegations of contraventions; assessing whether a violation of the UTR has occurred; determining whether a notice of violation should be issued; and
- updating the National DNCL.
The responsibility of investigating complaints and issuing notices of violation as well as imposing monetary penalties will remain the responsibility of the Commission. Registration by Consumers
Consumers must themselves take the responsibility to register on the National DNCL in order to avoid future telecommunications from telemarketers. Once a consumer registers on the National DNCL they will have the option of de-registering. Their registration will automatically expire three years after registration. It will be the consumers' responsibility to register and re-register their telephone number. Consumers are not required to pay any fees to register a telephone or fax number on the National DNCL.
In addition, consumers may register on the National DNCL and consent to receive particular telemarketing. A telemarketer or a client of a telemarketer must obtain a consumer's express consent to be contacted via a telemarketing telecommunication when that consumer's telecommunications number is registered on the National DNCL prior to the initiation of a telemarketing telecommunication to that consumer's number.
If a telemarketer continues to contact a telephone number registered on the National DNCL, the consumer will have the right to file a complaint within 14 days of receiving the telemarketing call. The Commission will establish a toll-free telecommunications number if a consumer wishes to file a complaint.
II:Unsolicited Telecommunications Rules
These rules govern the general behaviour of the telemarketer and compliment the National DNCL. As such, they set out:
- the application of the UTR;
- the National DNCL rules and exemptions (as discussed above);
- the Telemarketing Rules and exemptions to these rules;
- the Automatic Dialing-Announcing Device ("ADAD") Rules; and
- record keeping requirements.
The UTR will come into force when an operator for the National DNCL has been selected. Until such time, the current rules will apply to all telemarketers and clients of telemarketers in their telemarketing activities.
Application of the UTR
The UTR applies to both telemarketers and clients of telemarketers in the solicitation of business. However, the Decision does not prohibit all telecommunications with consumers and as such the Decision implements a partial ban on telemarketing. The prohibition is only against making telecommunications to consumers who have voluntarily registered on the National DNCL.
The Telemarketing Rules
In previous decisions and orders, the Commission established the current Telemarketing Rules. The Decision states that the Telemarketing Rules will apply equally to telemarketing efforts made towards residential consumers, business consumers and those that are exempt from the application of the National DNCL.
The Decision assesses the Telemarketing Rules in light of the upcoming National DNCL. This includes the responsibility of individual telemarketers to continue to maintain their own "do-not-call lists." However, the length of time by which the consumer's request must be implemented will be extended from 30 days for voice telemarketing and seven days for a fax telemarketing, to a 31 day grace period for both voice and fax telemarketing telecommunications in the interest of regulatory symmetry. The existing three-year registration period that must be implemented by telemarketers for requesting consumers will be maintained as it is in line with the National DNCL rules. The Commission imposes a requirement that a telemarketer is to provide caller identification requirements upon reaching the intended party. In light of its determination in this matter, the Commission will not address the parties' arguments with regard to privacy and freedom of expression. Calling hours will also be modified by the new Telemarketing Rules. Subject to certain exemptions, a telemarketing telecommunication (both fax and voice) is restricted to the following hours: 9:00 a.m. to 9:30 p.m. on weekdays (Monday to Friday); and 10:00 a.m. to 6:00 p.m. on weekends (Saturday and Sunday). The hours refer to those of the consumer receiving the telemarketing telecommunication.
Telemarketers will be Required to Subscribe to the National DNCL
In order to generate funds to operate the system, the Commission has held that all telemarketers must obtain a subscription to the National DNCL. As subscribers, telemarketers will be required to pay all applicable fees prior to initiating a telemarketing telecommunications campaign. The telemarketer is also prohibited from initiating telemarketing telecommunications on behalf of its client(s) until the client(s) is a registered subscriber to the National DNCL.
Automatic Dialing-Announcing Device Rules
The use of an ADAD in initiating telemarketing telecommunications is prohibited, unless express consent has been obtained from the consumer. The Commission also notes that the use of an ADAD is prohibited for the purpose of requesting that a consumer hold the line until a telemarketer becomes available, or for activities such as radio station promotions or for referring consumers to 900 or 976 service numbers.
Record Keeping Requirements
A telemarketer, whether conducting telemarketing on its own behalf or on behalf of a client must maintain records to demonstrate the following to each client:
- proof of subscription to the National DNCL; and
- proof of payment of fees to the National DNCL operator.
This proof should be maintained for a period of three years, as the Commission has the authority to commence proceedings in respect of a violation of the UTR for a period of up to two years following the occurrence of the subject-matter for which the proceeding came to be known to the Commission.
III: Enforcement of the Unsolicited Telecommunications Rules
This Decision has established a detailed system for filing complaints as well as guidelines for the investigation process and factors in determining whether to issue a notice of violation.
The Commission is granted substantial flexibility in determining whether a violation and monetary penalty should be imposed. While this Decision lists several factors to be taken into consideration, they do not appear to be exhaustive in determining a violation. The factors outlined by the Commission include:
- the nature of the violation (minor, serious, very serious, negligent or intentional);
- the number and frequency of complaints and violations;
- the relative disincentive of the measure; and
- the potential for future violation.
If it is found that a violation has occurred, the Commission will retain the right to impose penalties per each violation of up to $15,000 for corporations. Telemarketers will have a due diligence defence available to them if they can demonstrate that the unsolicited telemarketing call resulted from an error and that all proper steps were taken to comply with the UTR.