The federal Canadian Radio-television and Telecommunications Commission (CRTC) announced today that, together with the Australian Communications and Media Authority (ACMA), it has assembled 12 international enforcement agencies to form an International Do Not Call Network.
For the CRTC’s complete news release see: CRTC announces creation of international network to facilitate cooperation on telemarketing enforcement.
The members of this newly created Do Not Call Network are: Australia, Canada, France, Hong Kong, Ireland, Israel, Korea, Mexico, New Zealand, Spain, the UK and the United States.
Under the new international Do Not Call Network, the CRTC and ACMA will act as the Network’s inaugural co-chairs, with the U.S. Federal Trade Commission hosting the secretariat.
In making the announcement, the CRTC said:
“Enforcement agencies face a common challenge in tracking down individuals and companies who violate telemarketing rules, but operate outside national borders,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. ‘A global problem calls for global solutions. Having a network that fosters collaboration will contribute to more effective cross-border enforcement activities and help reduce unwanted telephone calls to Canadians from foreign telemarketers.’
The International Do Not Call Network will facilitate cooperation between agencies that enforce telemarketing rules in their respective countries. Members will meet annually to establish best practices and encourage the development of robust telemarketing laws around the globe. The network will also work to harmonize telemarketing policies between countries to improve enforcement activities across different jurisdictions.”
Regulation of Telemarketing in Canada
Competition Act
The federal Competition Act makes it criminal offences to engage in deceptive telemarketing or to engage in telemarketing unless certain required disclosure under the Act is made.
Under section 52.1, “telemarketing” is defined as “the practice of using interactive telephone communications for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest”. In its telemarketing enforcement guidelines (Telemarketing – Section 52.1 of the Competition Act), the Competition Bureau has taken the position that “interactive telephone communications” does not include fax, Internet or automated pre-recorded messages but are limited to live voice communications between two persons.
Under the Competition Act’s deceptive telemarketing provisions, it is a criminal offence to: (i) make materially false or misleading representations; (ii) operate a contest where the delivery of a prize is conditional on prior payment or certain disclosure is not made (regarding the number and value of prizes, area or areas to which they relate and odds of winning); (iii) offer free or below cost products, as consideration for supplying another product, unless disclosure is made of the fair market value of the first product (and any restrictions, terms or conditions relating to its supply); or (iv) offer products for sale grossly in excess of their fair market value where their delivery is conditional on prior payment by buyers.
The Competition Act also requires that certain disclosure be made by telemarketers both at the beginning of a call and sometime during a call. For example, the Act requires that the following information be disclosed by telemarketers at the beginning of a call: (i) the person on whose behalf the call is being made; (ii) the nature of the product or business interest; and (iii) the purpose of the call.
Like the general misleading advertising provisions of the Competition Act (sections 52 and 74.01), the general impression is relevant to determining whether a claim made by a telemarketer is materially false or misleading. Unlike misleading advertising generally, however, if misleading claims are made in the context of telemarketing, the Competition Bureau does not have the discretion to proceed civilly, given that the only deceptive marketing provisions are criminal offences under section 52.1.
Deceptive telemarketing is punishable, on indictment, by unlimited fines (i.e., in the discretion of the court), imprisonment for up to 14 years, or both (and on summary conviction, to fines of up to $200,000, imprisonment for up to one year, or both). There is also no “mens rea” (i.e., intent) required for deceptive telemarketing, in that the offences under section 52.1 are strict liability offences. As such, proof of the act, regardless of any guilty mind (or lack of), is sufficient to make out an offence. There is, however, a due diligence defence available under section 52.1.
The enforcement of the telemarketing provisions of the Competition Act has been an enforcement priority for the Competition Bureau in recent years, although for the most part aimed at companies and individuals engaged in true “scams” not legitimate marketers who may have committed technical violations of the Act. Having said that, a number of individuals have been charged, convicted and imprisoned in connection with the marketing of a broad range of products, including business directories, office supplies and credit cards.
The Competition Bureau has also issued enforcement guidelines on deceptive telemarketing: Telemarketing – Section 52.1 of the Competition Act (2009).
The Competition Act is not, however, the only relevant legislation applicable to telemarketing. In this regard, provincial consumer protection legislation can also be relevant as well as the National Do Not Call List under the federal Telecommunications Act.
Provincial Consumer Protection Legislation
In addition to federal law, in some provinces consumer protection laws may also apply to telemarketing activities.
For example, in British Columbia the Telemarketer Licensing Regulation (the “Telemarketer Regulation”) under the Business Practices and Consumer Protection Act applies to “telemarketers”.
“Telemarketer” is defined in the Telemarketer Regulation as “a supplier who engages in the business or occupation of initiating contact with a consumer by telephone or facsimile for the purpose of conducting a consumer transaction.”
The Telemarketer Regulation requires telemarketers to obtain licences for each location from which they conduct business in British Columbia, to display licences, report certain changes in a telemarketing business (e.g., the names and addresses of new employees and changes in senior officers) and maintain certain records (e.g., in relation to sales contracts with consumers).
The Telemarketer Regulation also regulates and prohibits certain activities by telemarketers, including regulating the days and times telemarketers can contact consumers, the frequency that telemarketers can contact consumers and requiring that certain disclosure be made.
National Do Not Call List
In addition to the federal Competition Act and provincial consumer protection legislation, the national Do Not Call List is also important for telemarketers in Canada to understand.
The Canadian Radio-Television and Telecommunications Commission (the “CRTC”) launched the National Do Not Call List (the “DNCL”) in Canada in 2008.
Generally speaking, telemarketers cannot contact consumers that have registered their numbers for free (residential, wireless, fax or VoIP) on the DNCL (subject to certain exceptions). Registration for consumers is valid for five years (and may be renewed) and becomes effective thirty-one days after registration.
Registration on the DNCL will not eliminate all telemarketing calls, as there are a number of exemptions including calls made by or on behalf of: (i) Canadian registered charities, (ii) organizations that telemarketers have done business with in the past eighteen months (or to whom a consumer has made an inquiry in the past six months), (iii) political parties, candidates and associations of members of a political party, (iv) people collecting information for surveys, (v) general circulation newspapers (for soliciting subscriptions), (vi) where express consent has been given, and (vii) calls to businesses.
Consumers may also directly or expressly request that the organizations listed above, except for market research firms in certain circumstances, place their numbers on specific do not call lists, in which case such numbers must be kept on their do not call lists for five years. (All telemarketers, even if they are exempted generally, must keep internal do not call lists.)
The CRTC also has other specific rules for telemarketers, including rules governing disclosure (e.g., requiring telemarketers to disclose why they’re calling and on whose behalf the call is being made), times for calling (e.g., telemarketers may only call within certain hours) and regulating the use of automated dialing-announcing devices (so-called “ADADs”).
Penalties for violating the DNCL rules, which are enforced by the CRTC, include penalties of up to Cdn. $1,500 per violation (for individuals) and up to Cdn. $15,000 per violation (for corporations).
___________________
For more information about our regulatory law services contact us: contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
