Pursuant to amendments made to the Telecommunications Act (“Act”), the Canadian Radio-television and Telecommunications Commission (“CRTC”) now regulates unsolicited telemarketing communications. The CRTC has created a set of “Unsolicited Telemarketing Rules” (“Rules”), and has also established a National Do-Not-Call List (“DNCL”).
Canada’s DNCL is now operative. In essence, this list enables consumers who do not want to receive telemarketing calls to register their telephone numbers with a registry maintained by Bell Canada. All businesses that conduct telemarketing in Canada, whether directly or indirectly through telemarketing service providers, are required to subscribe to the DNCL to ensure that they do not call numbers that have been registered.
Consumers may register any Canadian telephone number on the DNCL, regardless of whether they use that number with a landline, a cellular telephone, or a fax machine. To register or de-register on the DNCL via telephone, consumers must call 1-866-580-DNCL (1-866-580-3625) or 1-888-DNCL-TTY (1-888-362-5889) from the telephone number that they wish to register or de-register. The same service will be available for fax numbers. Online registration is also available at www.LNNTE-DNCL.gc.ca.
The effect of registering a number on the DNCL will be to prohibit organizations and their telemarketing service providers from calling that number unless the consumer has expressly consented to being called, or the organization or the consumer falls within an exempt category. Businesses which employ a telemarketing service provider must make all reasonable efforts to ensure that the telemarketers calling on their behalf do not initiate calls to consumers registered on the DNCL.
A 31-day grace period following a consumer’s registration is granted to allow telemarketers time to update their telemarketing lists. In other words, an organization is not prevented from calling a number until 31 days following its registration on the DNCL. In effect, this permits organizations to download updates from the DNCL every 31 days (although this may be done more frequently, if desired) and delete those numbers from their lists prior to making any unsolicited telecommunications.
Telemarketer Registration and Access to the DNCL
All telemarketers and businesses which employ telemarketing companies to make calls on their behalf will be required to register with Bell Canada, even if they only make exempt unsolicited calls. Registration is free, and must be done through the National DNCL website (www.LNNTE-DNCL.gc.ca).
Unless they are exclusively making calls which are exempt from DNCL requirements, telemarketers will also be required to purchase a subscription. The fees to be paid will vary, based on the number of area codes a telemarketer intends to call. Currently, the annual fee for all area codes is $11,280. For smaller telemarketers, individual area codes can be accessed for an annual fee of $615 or specific phone numbers can be verified at 50 cents each.
An additional “complaints operator” charge, not yet effective, is anticipated to be payable by all telemarketers, whether calling under an exempt category or not. This fee will be payable to a third party and is meant to offset the costs of administering a DNCL complaint hotline and investigating violations.
Exempt Categories of Telemarketing Communications
The amendments to the Act provide for a number of categories of telemarketing communications to be exempt from the DNCL Rules. These are:
(i) communications made by charities registered under the Income Tax Act;
(ii) communications made for purposes of elections, surveys, and soliciting newspaper subscriptions;
(iii) business-to-business communications; and
(iv) communications based on an existing business relationship with a consumer.
Existing Business Relationship Exemption
For most organizations, the most significant category of telemarketing call exempt from the DNCL will be the “existing business relationship” category. In other words, a telemarketer may call a consumer who has registered on the DNCL if the telemarketing business has an existing business relationship with the consumer and the consumer has not made a specific request to the organization not to be called.
An existing business relationship is established between a consumer and an organization in one of three ways, including a consumer’s purchase of services or the purchase, lease or rental of products, within the 18-month period immediately preceding the date of the telecommunication.
Telemarketers’ Internal Do Not Call Lists
Organizations that benefit from one of the exemptions from the DNCL must still maintain an internal do not call list containing the names (and presumably telephone numbers) of individuals who have contacted the organization directly requesting that they not receive further calls. In other words, consumers who could have been called by the organization, for example because they have an existing business relationship with it, may still request not to be called.
Violations and Complaints
A consumer who continues to receive telemarketing calls after registering on the DNCL (not subject to exemptions and after the 31-day grace period) may file a complaint either by calling the DNCL toll-free numbers noted above, or through the National DNCL website. The complaint must be filed within 14 days of the call, and must include the name or number of the telemarketer (or business employing the telemarketer), the date of the call and the nature of the complaint.
Violations of the DNCL Rules will expose organizations and individuals to “administrative monetary penalties” (“AMPs”) of up to $15,000 for a corporation and $1,500 for an individual per violation. Liability is imposed on the telemarketer and on the business employing the telemarketing service provider.
The CRTC has indicated that it will take a compliance-oriented approach to enforcement, encouraging first-time offenders to remedy their practices rather than moving directly to imposing penalties. In order to maintain enforcement flexibility, the CRTC will evaluate a number of factors before determining whether to issue a notice of violation and in setting the amount of the penalty.
Due Diligence Defence
The Act provides for a due diligence defence in respect of violations of the Rules. The CRTC has provided criteria for telemarketers to follow in order to establish the due diligence defence. These criteria provide important guidance to telemarketers and their telemarketing service providers in establishing internal procedures to ensure, to the extent possible, compliance with the new DNCL regime and to establish the strongest due diligence position as a defence to any potential violations.
Some Final Remarks
Clearly, the CRTC’s new National Do Not Call List will have an important impact on businesses that rely on telemarketing, either directly or through marketing partners, to promote their products. Businesses will need to establish and ensure compliance with internal procedures to conform to the requirements of the DNCL. Training of staff by businesses and their telemarketing service providers will be important. Finally, documentation providing for consumers’ consent will need to be revised and appropriate contract provisions with service providers will need to be stipulated.