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  1. 1. MILLER THOMSON LLP Barristers & Solicitors, Patent & Trade-Mark Agents T E L E C O M M U N I C AT I O N S U P D AT E November 2005 PUTTING TELEMARKETERS ON HOLD: C A N A D A T O I M P L E M E N T A N AT I O N A L “ D O The Telecommunications N O T C A L L ” R E G I S T RY Update is published periodically by Miller Michael E. Piaskoski Thomson LLP as a service to Toronto our clients. We encourage you 416.595.8571 to forward the e-mail delivering this newsletter to On October, 24, 2005, Bill C-37, An Act to amend the anyone (internal or external to Telecommunications Act, passed third reading in the House of Commons, bringing your organization) who might Canada one step closer to implementing a more effective and meaningful regulatory be interested. Complimentary regime to combat unwanted telemarketing. This bill sets out the legislative e-mail subscriptions are framework to enable the CRTC (Canada's telecom regulator) to create and enforce a available by contacting national Do Not Call registry, including levying significant financial penalties marketingontario@ against those telemarketers who choose to ignore the list. The bill also exempts what the federal government views as more acceptable or less intrusive forms of telemarketing, such as those of charitable organizations in their fundraising efforts. The Current Telemarketing Rules The Telecommunications Act empowers the CRTC to make orders prohibiting or regulating the use of telecommunications facilities for the provision of unsolicited telecommunications. In this regard, the CRTC has established a set of telemarketing rules that apply to all unsolicited calls made for the purpose of solicitation (including calls made by or on behalf of charitable organizations), but do not extend to calls where there is no attempt to advertise or offer a product or service. These rules require, among other things, that, upon a customer's request, a telemarketer remove the customer's name and telephone number from its calling list and maintain a "Do Not Call" list which is to remain active for three years. Further, during each call, telemarketers must identify the person or organization they represent and, upon request, provide the contact particulars of a responsible person to whom the called party can write. A complete description of the CRTC's telemarketing rules can be found on its website at When a telemarketer breaches these rules, the CRTC can order the telemarketer’s Inside telecom service provider to suspend or disconnect its service, and even issue a Creation of a Natural Do Not blanket order prohibiting all telecom service providers from providing service to the Call List telemarketer for a certain period of time. The Telecommunications Act also provides Exemptions for Certain Types for the criminal prosecution for the breach of any CRTC order relating to of Telemarketing telemarketing1; however, experience has shown that such prosecutions are rare and Financial Penalties for difficult to enforce. Telemarketers Who Do Not Comply In May of 2004, the CRTC attempted to "beef up" its telemarketing rules to include 1 Upon summary conviction, maximum fines for an individual are $10,000 for first offences and $25,000 for subsequent offences, and, for a corporation, $100,000 for first offences and $250,000 for subsequent offences.
  2. 2. more specific identification procedures and mandatory reinforcement of Do Not Call lists for all telemarketers, as well as the requirement for the tracking and reporting of telemarketing complaints and the establishment of a consumer awareness program.2 However, the Canadian Marketing Association was successful in obtaining a stay of the CRTC's decision to amend the rules, which will remain in place pending the Association's application to the CRTC to review and vary its decision3. This application has yet to be decided and, given the proposed amendments to the Telecommunications Act, may indeed become largely irrelevant. Features of the New Telemarketing Legislation The Creation of a National Do Not Call List The most significant aspect of Bill C-37 is the framework for the creation of a national Do Not Call list or registry. This means that consumers will no longer have to contact each telemarketer individually to remove themselves from a specific calling list. Rather, they will be able to sign up for a national centralized registry by, for example, placing a single 1-800 call or completing an on-line form. Telemarketers would then be expected to access the list on a regular basis and ensure that those persons on the list are not called.4 Exemptions for Certain Types of Telemarketing Since Bill C-37 was first introduced in December of 2004, it has been amended to exempt unsolicited telecommunications by certain organizations or in respect of certain activities from adherence to the national Do Not Call list. In particular, the national Do Not Call list will not apply to unsolicited telecommunications made: • by or on behalf of a registered charity; • by or on behalf of a registered political party, an association of members of a political party, or a nomination contestant, leadership contestant or candidate of a political party; • for the sole purpose of collecting information for a public survey; • for the sole purpose of soliciting newspaper subscriptions5; and • to a person with whom the caller has an "existing business relationship" and who has not requested to be removed from the caller's call list. "Existing business relationship" is defined as a business relationship that has been formed by a voluntary two- way communication between the person responsible for the call and the person called, where: • the person called has purchased, leased or rented any products or services from the person responsible for the call within an 18-month period prior to the date of the call; • the person called as made an inquiry or application in respect of a product or service offered by the person responsible for the call within a six-month period prior to the date of the call; or • there is a written contract between the person called and the person responsible for the call that is currently in existence or that has expired within an 18-month period prior to the date of the call. This means that consumers may be contacted by a company for up to 18 months after they have cancelled a service with the company, and can only avoid further calls by requesting to be put on the company's own individual Do Not Call list. It should be noted that all persons who are exempt from the national Do Not Call list are still required to maintain their own Do Not Call list and ensure that calls are not made to persons who have asked to be placed on the list. In addition, exempt persons are required, at the beginning of each call, to identify the purpose of the call, as well as the person or organization on whose behalf the call is being made. 2 Review of telemarketing rules, Telecom Decision CRTC 2004-35 (21 May 2004). 3 Application by the Canadian Marketing Association to stay Decision 2004-35, Telecom Decision CRTC 2004-63 (28 September 2004). 4 A similar Do Not Call registry was established in the United States in 2003 and has proven to be very popular and effective, with over 65 million registrants; representing over half of all US households. 5 This latest exemption was added at the bill's third reading before Parliament. 2
  3. 3. Financial Penalties for Telemarketers Who Do Not Comply The proposed amendments under Bill C-37 strengthen the CRTC's enforcement tools by giving it the power to impose administrative monetary penalties ("AMPs", which are, in effect, fines) that will be applied against each offence (e.g., each telemarketing call made to a number that is on the Do Not Call list). Individuals will be subject to an AMP of $1,500 per offence and corporations will be subject to an AMP of $15,000 per offence. Liability of Management The proposed amendments also make a person vicariously liable for an offence committed by its employee, agent or mandatary, provided that such persons are acting in the scope of their employment or authority. However, the amendments do provide for a defence of "due diligence," which allows a person charged with an offence to provide evidence that he or she took all reasonable efforts to ensure that the actions taken were in compliance with the law. Administration and Enforcement Tools The proposed amendments give the CRTC the power to delegate, subject to its supervision, the administration and operation of this Do Not Call list to a third party. The CRTC has also been given the power to delegate various administrative, investigative, inspection and enforcement powers to a third party, including the ability to request periodic reports from telemarketers and to search a telemarketer's premises. Looking Ahead Once Bill C-37 is passed, it is expected that the CRTC will hold public consultations with all interested parties to assist it in the guidelines for the creation, administration and enforcement of the national Do Not Call registry. While it remains to be seen whether the national registry will act as an effective shield against unwanted telemarketing calls (or whether it will suffer the same plight as the federal gun registry), most Canadians (with perhaps the exception of the telemarketers) see it has a welcome and long overdue “step in the right direction.” However, if there are any further exemptions carved out of the bill during the Senate hearings, there may be very few telemarketers left who actually have to abide by the Do Not Call list. 3
  4. 4. MILLER THOMSON LLP C O M M U N I C AT I O N S L AW G R O U P For further informaion please contact: Michael E. Piaskoski at 416.595.8571 or Note: This newsletter is provided as an information service to our clients and is a summary of current legal issues. These articles are not meant as legal opinions and readers are cautioned not to act on information provided in this newsletter without seeking specific legal advice with respect to their unique circumstances. Miller Thomson LLP uses your contact information to send you information on legal topics that may be of interest to you. It does not share your personal information outside the firm, except with subcontractors who have agreed to abide by its privacy policy and other rules. w w w. m i l l e r t h o m s o n . c o m 4