If you have just heard about Canada’s new anti-spam law (commonly known as “CASL”), or are trying to prepare to comply with it, you may be overwhelmed in terms of how it applies to your organization. You may also be concerned that, commencing on July 1, 2014, failure to comply with CASL can have serious consequences, including significant administrative monetary penalties (up to $1 million per violation for individuals and up to $10 million per violation for organizations). Moreover, you may be concerned that as of July 1, 2017 CASL allows private rights of action to occur; this would enable any individual or organization affected by a contravention of CASL to sue for statutory and compensatory damages, and which creates a risk of potential class actions.
Do NOT panic! Here are 10 basic steps to help you prepare for compliance, as you will need to act NOW to meet the July 1st deadline.
- Appoint someone to oversee compliance with CASL
It will be important to have someone in your organization review CASL, determine who else in your organization should assist in preparing to comply with CASL, and oversee compliance with CASL. This person would be a single point of contact should someone in the organization have questions about CASL. It doesn’t mean that s/he has to know all the answers! This person is a starting point in determining how to appropriately deal with questions, especially where the organization is large. This role can be shared to assist with the workload. If it is not shared, do not forget to also appoint a back-up person to handle absences from the office.
- Accept that CASL applies broadly and move on
If your organization sends electronic communications, such as email and text messages, CASL will very likely affect you. Although CASL refers to “spam”, the law is drafted so that it applies to a much broader array of messages than would normally be regarded as spam. CASL applies to “commercial electronic messages” (“CEMs”), meaning any message that is transmitted by means of telecommunication and that is intended to encourage participation in a commercial activity. “Commercial” is defined very broadly and includes any activity with a commercial character, whether or not there is an expectation of profit. Technically, a single email sent to a person that has a commercial purpose is caught under CASL. This means that CASL could apply to an e-blast advertising a new product or service, an email distributing a newsletter or updates that are of interest to an industry, as well as email invitations to attend a promotional event hosted by an organization.
To determine whether an electronic message is a CEM, some of the factors that need to be considered include the content of the message, the hyperlinks in the message to content on a website, and the contact information contained in the message. If it would be reasonable to conclude that at least one of its purposes is to encourage participation in a commercial activity, then it would be viewed as a CEM. In some cases, rather than analyze whether a message is a CEM, it may be easier (and more cautious) to meet the relevant requirements around consent and content.
If you think that CASL doesn’t apply to you because you are a foreign organization, or you only send electronic messages to recipients outside of Canada, think again. CASL applies if a computer system in Canada is used to send or access the electronic message.
CASL also prohibits the unsolicited installation of computer programs (which provisions come into force on January 15, 2015) as well as the alteration of transmission data in an electronic message. However, many organizations will be most interested in the provisions relating to the sending of CEMs. Also, if you are overwhelmed, you may wish to focus on the provisions regarding CEMs first and then work on the other sections afterwards.
- Understand the general key rule: An organization cannot send CEMs unless (i) the recipient has consented to receiving them (“Consent Requirement”), and (ii) the CEMs meet the required content and unsubscribe requirements (“Content Requirements”)
Consent — Consent can be expressed or implied. Express consent is where the recipient of the CEM has given his or her consent to receive the message. In other words, it is an “opt-in” consent, meaning the recipient signed a document or checked a box on a form, indicating his or her consent to receiving these kinds of messages from the sender. The key to express consent is that the recipient actively does something to indicate consent. Implied consent will be discussed in Step 4 below.
Identity and contact information of the sender — CEMs must contain the name of the sender and the sender’s contact information (i.e., mailing address and telephone number, email address or web address). If the sender is sending the message on behalf of a third party, the sender must identify the person on whose behalf the message is being sent.
Unsubscribe mechanism — CEMs must also contain a mechanism that allows the recipient to unsubscribe from receiving future CEMs from the sender. The unsubscribe mechanism must be free and easy to use, and it must be accessible via electronic means, such as an email address or link to a website to unsubscribe. A request to be unsubscribed must be made effective within 10 business days.
- Know that there are exceptions to the general key rule, but they are not all equal
CASL sets out a number of exemptions that exempt certain kinds of CEMs from the Consent Requirement or both the Consent and Content Requirements.
Before applying any of these exemptions, you will need to carefully consider the specific circumstances surrounding the transmission of the CEM.
The following are some examples of types of CEMs that are exempt from both the Consent and Content Requirements:
CEMs sent in response to a request, inquiry or complaint;
CEMs where the sender and recipient have a “family” or “personal” relationship (these terms have a specific meaning in CASL);
CEMs sent internally within an organization, or between organizations that have an ongoing relationship, where the message concerns the activities of the organization;
CEMs that the sender reasonably believes will be accessed in a foreign country identified in the CASL regulations and that comply with that foreign country’s anti-spam legislation.
If you can rely on implied consent, then you will be exempt from the Consent Requirement, but not the Content Requirements. Some of the implied consent situations occur where there is an “existing business relationship” or “existing non-business relationship” between the sender and recipient. Those are defined terms in CASL. An existing business relationship applies to, for example, customers who have purchased or leased a product or service from the sender in the past 2 years, and to customers with whom the sender has a contract that is ongoing or has expired within the past 2 years. In the not-for- profit context, implied consent applies to messages sent by a registered charity to any person who made a donation or did volunteer work for that charity in the past 2 years, and to messages sent by a club, association or voluntary organization to its current members and those who ceased being a member within the past 2 years.
In addition, CASL has a transition period of 3 years following the coming into force of CASL (July 1, 2014 to June 30, 2017), during which organizations can continue sending CEMs to those with whom they have an existing business or non-business relationship, without being limited to the 2-year or 6-month time limit in those categories. This means that an organization can continue sending CEMs to its current and past customers, donors or members during the transition period, but the Content Requirements must still be met in such circumstances, and if a recipient chooses to unsubscribe during that period, the organization can no longer send them CEMs. To rely on this transition period, there must have been the communication of CEMs between the sender and recipient by July 1, 2014.
There are other exemptions. The key is to carefully review the requirements of the exemption, and determine whether it exempts you from only the Consent Requirement or both the Consent and Content Requirements.
- Assess your electronic communications database and procedures, including the unsubscribe mechanism
Now knowing some of the basics of CASL, determine how CASL applies to your organization’s operations. This will require assessing each department of your organization and how they use electronic communications.
Some things to consider include: how many databases are used with respect to sending out CEMs; whether you can rely on your database for the purposes of implied consent; whether any of the templates you are currently using need to be modified to meet the Content Requirements; which database will you use to record CASL consent; are you already carrying out unsubscribe requests within 10 business days; and what policies and procedures do you already have in place.
- Develop a strategy to get express consent
Given that implied consent can expire if the recipient’s relationship with the sender comes to an end, and it may be a challenge for organizations to keep track of who purchased a product or service from them in the past 2 years, for example, it is recommended that organizations obtain express consent wherever possible, since that is valid until the recipient chooses to withdraw his or her consent.
When seeking express consent, CASL requires an organization to clearly and simply specify: (i) the purpose for which consent is sought, (ii) the identity of the organization seeking consent and the organization on whose behalf consent is sought, (if different), (iii) the contact information of these organizations (i.e. mailing address and telephone number, email address or web address), and (iv) a statement that the recipient may withdraw his or her consent by using the means provided. Consent can be obtained orally or in writing. In all cases, adequate records should be kept to demonstrate that consent was given.
In developing your strategy, some things to consider include how you want to obtain consent (e.g., only electronically so you do not have to be concerned about recording oral consent), whether to test the request for consent with a small pool of recipients first, when you want to send the request and a follow up if you do not receive a response, and whether you need to translate the request into French to satisfy French language laws.
Note that sending out a request for consent is in itself a CEM. This is a very good reason to start to obtain express consent before July 1st.
- Create policies and procedures to address CASL’s requirements
It will be important to create policies and procedures so everyone knows how to carry out activities to comply with CASL. These policies and procedures should address email communications, capturing consent, the unsubscribing process, and how to handle questions or complaints.
- Test and monitor various activities
Before sending out a request for consent, it should be tested among a small group of internal people. This will allow you to determine whether people will understand the request, find it easy to indicate consent, and whether the response provided is correctly recorded in your database.
You should schedule regular reviews of activities to ensure that the policies and procedures are being complied with or are updated if needed. This will be especially important for the unsubscribing process, as it needs to be effected within 10 business days.
- Review relationships with third parties
Assess whether your organization uses third parties to assist you with your electronic communications, or whether any third parties rely on the consent you obtained to send CEMs to those persons who provided you with consent. Review the contractual agreement to determine whether any changes are required to increase the likelihood of compliance with CASL. An organization should not assume that third parties understand or will comply with CASL.
- Educate everyone in your organization about CASL
An organization can be liable for a violation of CASL committed by their employees acting within the scope of their employment. So it will be important for every person at the organization to understand the basic points of CASL and what the organization’s policies and procedures are. Presentations, memos, tips sheets and frequently asked questions are some ways to carry out the training.
These steps are not exhaustive in terms of preparing for compliance. The steps to be taken also will vary among organizations, but at least you now have a plan to work with.