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  • The first point that I want to make about telemarketing is that it is an extremely effective marketing channel. Most of you are well aware of that in terms of your own businesses of course. But from a macro viewpoint, CMA’s recent study of Marketing’s Impact on the Canadian Economy indicates that it directly drives over $25 Billion in sales and creates over 155,000 jobs. It has a solid ROI of $7.39 per dollar invested for consumer marketing, comparing quite favourably with other channels. Some U.S. research from a few years ago indicated that 32% of consumers have responded positively to telemarketing by making a purchase during the previous year. And in this case men were the shopping champions, with 34% of men and 30% of women indicating a purchase through outbound telemarketing Mainly – publication subscriptions, phone/cable services But, it’s a consumer issue in terms of the annoyance factor.
  • • Growing Privacy awareness has greatly raised the issue profile over the past 10 years. A well-publicized survey for Industry Canada found strong support for a DNC, although much of the reporting overstated the negative reaction to telemarketing (97% when you include the 38% who tolerate calls). I think the best indicator of strong concern about telemarketing is the 66% who say they will sign up for a national Do Not Call service. Of those who had made a complaint about an unsolicited call – 39% found it was resolved, 59% indicated their complaint was not resolved! A major source of complaints at CMA; most consumers think we have all the lists!
  • CRTC’s regulation of telemarketing go back to the 1980s – it has been the main component. Competition Act tends to be oriented toward provision to combat fraud – eg: emphasis on clear identification and contact coordinates. (B.C. has the only provincial regime) And CMA’s code has been the standard for self regulation…
  • Our code is an important guide for businesses and other organizations regarding the best practices in Ethical Marketing. It’s very important to maintaining overall consumer confidence in the marketplace; and can be key to protecting the brand image that organizations invest in so heavily. As a self regulatory standard, the Code serves as a deterrent to unwarranted government intervention in the marketplace. Equally important, where government does decide to act the code can serve as a model for government regulation – something I’ll come back to later.
  • This is just a brief general overview of how we arrived at the current situation. Strong growth of the contact centre industry during the 80s and 90s ultimately translated into consumer pressures to address telemarketing. Since 2001, CMA has been urging the CRTC to adopt a National DNCL as the most effective way to address the frustration of many consumers. Other countries started setting up national Do Not Call “consumer preference” service. For Canada, the launch of the U.S. service in 2003 was a key event; it now has around 140 million registrations. Important aspects of the Canadian program were modelled on the U.S. service. Passage of Bill C-37 and follow-up hearing about the regulations set out the framework and key exemptions – some quite controversial... One important outstanding issue will be to ensure that access to the list is reasonable and affordable for organizations required to use it.
  • So let’s look at the rules for the new NDNCL – these are the basics: Anyone doing telemarketing to consumers has to use the list. You can’t call listed consumers unless they are existing customers, or you have consent to call them.
  • It effectively covers all telecommunications variations.
  • Subscribers can only use the list themselves, or share it with a contractor. Can use the list as often as they want; key factor is that new listings must be captured within 31 days, so it’s basically a minimum of monthly use for those engaged in ongoing telemarketing. Consumers will register by phone or web, for 3 year period. They’ll then have to re-register.
  • There were a number of key exemptions: calls made on behalf of charities Calls made relating to elections, surveys and newspaper subscriptions Calls to an existing customer (within the definition set out by Parliament) And in the course of the hearings to prepare the detailed regs we asked for and got an exemption for B2B
  • Despite exemptions, an organization doing telemarketing that is exempt from having to use the National DNCL must still follow all the other rules, and will have to register with the NDNCL operator (Bell)
  • The definition for existing business relationship was crafted to be largely consistent with the one in effect in the U.S. - Except we have an exemption of 6 months from an inquiry versus 3 months in the U.S.
  • Another important exemption is the one that crosses all industry categories. If a consumer has given their consent to “receive marketing, including by telephone”, then they can be contacted. And that holds until they revoke their permission. For express consent, the CRTC has said they will go with PIPEDA usage – propoerly used opt-out is sufficient – 3 easies
  • Let’s take a quick look at the other rules. Again, these are rules that apply to any telemarketing activity…
  • New sections highlighted here: New calling hour restrictions – these refer to the local hours of the call recipient. Don’t cover statutory holidays (provincial variations), although we do in CMA code. Call scripts will need to be revised to cover the info requirements at the start of a call. (no creative scripts that don’t cover this off right up front!)
  • This was a previous requirement with the one new provision, as highlighted; it’s much better that what was proposed in 2004, which was a staffed toll free line 24/7. … in this case…
  • The telemarketer can use a live operator or a voice mail system; but at minimum they must be called back within 3 days.
  • Some of the old rules are there again. For example: Must allow the display of a number that allows consumers to contact the telemarketer. No calls to emergency lines, healthcare facilities.
  • All organizations that do telemarketing must maintain their internal DNCs. I think this is critical for everyone but especially organizations doing calling that is exempt from the National DNCL – it gives consumers an avenue to stop unwanted calls even from the exempt categories and it is a powerful argument with policy makers. But if orgs don’t obey the internal DNC rule, then exemptions will be jeopardized.
  • Limited call abandonment rates - this ones important because it stems fro a big irritant – the dead air phenomena when you answer a call.
  • The big change here is the font size requirement on the fax – I know they’ll be looking for it. The CRTC folks say that they’re already collecting samples.
  • Some of the rules that apply equally to voice and fax telemarketing.
  • ADADS remain prohibited for telemarketing purposes. However they can be used for announcements, appointment reminders , that sort of thing. They are used in the states. We had suggested they be allowed for telemarketing to existing customers but the CRTC was adamantly opposed. They had alot of trouble with ADADs back in early ‘90s and that still drives their position on the issue. And these new telemarketing and NDNCL rules are backed up with teeth. It sounds like they’ll be taking a moderate educating approach in the early months, but that won’t necessarily extend to obvious or repeat offenders.
  • Given the potential penalties, it’s important that organizations have their ducks lined up. Doing your due diligence will go a long way to protecting against or in case of miscues. The CRTC can go after either the telemarketer, or the telemarketer’s client… … so… what are some of the key things organizations should be doing.
  • Get a project team in place. Possibly headed by your privacy officer, but with operations, legal and technical participation. Revise scripts, contracts Prepare for list downloading, and use. Also record keeping. And of course employee training. … for more detailed info…
  • Some good CRTC contact coordinates and references
  • I’ll just wrap up by revisiting my earlier comments about the benefits of self-regulation – one being that it can serve as a model when gov’t decides to impose an industry wide set of rules…
  • Going back to the 1980s, the CMA Code had set out rules for telemarketers, with a number of additions and updates over the years. Most of those rules have now been incorporated into the new telemarketing regulations: Some notable examples include Calling hours for both fax and voice telemarketing limited to 9am to 9:30pm; 10 to 6 on weekends. Restriction on abandonment rates Mandatory use of the Do Not Call program. One of our rules that hasn’t been pulled into the CRTC rules is statutory holidays – you’d be surprised… And given that use of our DNC does not apply to existing customers, a requirement for each member to maintain internal Do Not Contact lists (actually for each channel) … So what is the effect of the new National program on the phone component of CMA’s Do Not Contact program…
  • A quick note on what all this means for the CMA’s Do Not Contact program: CMA’s Ethics & Privacy Committee have looked at the transition and opted for a “better safe than sorry” approach. Consumers who’ve registered for our service have been told they’ll be covered for 3 years. And since some may not hear about the National program right away, or may mistakenly believe they’re already covered, we don’t want to take the risk of reputation damage to the Association or member companies. And the fact is that virtually all our subscribers get both the mail and phone components of our suppression list, so a requirement that members continue to run the phone component as the list shrinks was thought to be a minor inconvenience. … but let me get back to the big picture in terms of the regulatory environment…
  • View the presentation

    1. 1. -- Telemarketing -- The New Regulatory Environment Wally Hill Vice-President Communications & Public Affairs Canadian Marketing Association Canadian Circulation Managers Association June 9, 2008
    2. 2. Telemarketing is big business <ul><li>Source: CMA’s Marketing’s Contribution to the Canadian Economy, Fall 2007 </li></ul><ul><li>In 2006: </li></ul><ul><ul><li>$4.1 billion was spent on telemarketing </li></ul></ul><ul><ul><li>generated $26.1 billion in sales </li></ul></ul><ul><ul><li>created 155,000 jobs </li></ul></ul><ul><li>60% are B2B calls; 40% B2C calls </li></ul><ul><li>Overall ROI of $6.24 per $1 </li></ul>
    3. 3. … But a controversial channel <ul><li>Most intrusive form of marketing </li></ul><ul><li>“ Right to be left alone” aspect of privacy </li></ul><ul><li>2003/04 Environics survey: </li></ul><ul><ul><li>80% support a National Do Not Call List (NDNCL) </li></ul></ul><ul><ul><li>66% would likely sign up </li></ul></ul><ul><li>Ineffective enforcement regime </li></ul><ul><li>Runaway leader in terms of consumer complaints to CMA </li></ul>
    4. 4. The regulatory framework for telemarketing in Canada <ul><li>Telecommunications Act </li></ul><ul><ul><li>CRTC rules and new services </li></ul></ul><ul><li>Competition Act (Section 52) </li></ul><ul><li>B.C. telemarketing licensing regime </li></ul><ul><li>CMA’s mandatory Code of Ethics </li></ul>
    5. 5. Responsible Self-Regulation <ul><li>CMA Code of Ethics </li></ul><ul><ul><li>Living document </li></ul></ul><ul><ul><li>Constant review to ensure Code reflects current marketing best practices </li></ul></ul><ul><ul><li>Significant amendments: </li></ul></ul><ul><ul><li>1993: Privacy Code & mandatory DNC </li></ul></ul><ul><ul><li>1996: Positive consent (sensitive info) </li></ul></ul><ul><ul><li>1997: Internet Marketing </li></ul></ul><ul><ul><li>1999: Marketing to Children </li></ul></ul><ul><ul><li>2002: Marketing to Teenagers </li></ul></ul><ul><ul><li>2002: Opt-out Consent </li></ul></ul><ul><ul><li>2004: New E-Marketing Rules </li></ul></ul><ul><ul><li>2007: Updated Code of Ethics </li></ul></ul>
    6. 6. How we got where we are today <ul><li>Telemarketing regulation gets underway in ‘80s </li></ul><ul><li>Growing pressure from consumers in ‘90s </li></ul><ul><li>CRTC consultations in 2001 </li></ul><ul><li>Launch of DNCs in other countries </li></ul><ul><li>CRTC Decision 2004-35 </li></ul><ul><li>Bill C-37 passed in November 2005 </li></ul><ul><li>Consultations in 2006/07 on regulations and operational details leading to Decisions 2007-48 & 2007-49 </li></ul><ul><li>National DNC List goes live by Sept. 30/08 </li></ul><ul><ul><li>New telemarketing rules also come into effect at that time </li></ul></ul>
    7. 7. <ul><li>Telemarketers and clients of telemarketers must </li></ul><ul><ul><li>Subscribe to the National DNCL prior to making any telemarketing telecommunications </li></ul></ul><ul><ul><li>Pay subscription fees and keep a record proof of payment and subscription for 3 ( three ) years </li></ul></ul><ul><li>May not use national DNCL for any purpose other than compliance with the rules </li></ul><ul><li>Do not call registered consumers unless you have prior express consent </li></ul>National DNCL Rules
    8. 8. National DNCL Application <ul><li>What types of telecommunications can be registered on the National DNCL? </li></ul><ul><ul><li>Canadian land line, wireless, fax, VoIP numbers </li></ul></ul><ul><ul><li>Conform to North American Numbering Plan </li></ul></ul>
    9. 9. <ul><li>May not sell, rent, lease, publish or otherwise disclose National DNCL to any person outside of the telemarketer’s or client of telemarketer’s organization, including affiliates* </li></ul><ul><li>May provide National DNCL to person supplying services to enable compliance with the rules </li></ul><ul><li>31-day grace period </li></ul><ul><li>A consumer’s registration is in effect for 3 years </li></ul><ul><li>* One entity is affiliated with another entity if one of them is controlled by the other or if both are controlled by the same person </li></ul>National DNCL Rules
    10. 10. Exemptions to National DNC List <ul><li>Types of telemarketing telecommunications are exempt, not organizations </li></ul><ul><ul><li>Made by or on behalf of charities registered under Income Tax Act </li></ul></ul><ul><ul><li>Made for purposes of election campaigns or survey research </li></ul></ul><ul><ul><li>Made to solicit a subscription to newspaper of general circulation </li></ul></ul><ul><ul><ul><li>Note: Exemption specific to newspapers – does not include magazines </li></ul></ul></ul><ul><ul><li>Calls where there is an existing business relationship consumer </li></ul></ul><ul><ul><li>Business-to-business calls </li></ul></ul>
    11. 11. Exemptions to National DNCL <ul><li>Organizations making exempt telecommunications must adhere to all the other telemarketing regulations </li></ul><ul><ul><li>Maintain an internal do not call list </li></ul></ul><ul><ul><li>Identify the purpose of their call at the beginning of the call </li></ul></ul><ul><li>Organizations solely making exempt telecommunications are not required to subscribe to the National DNCL, but they must register with the operator </li></ul>
    12. 12. <ul><li>Definition of existing business relationship </li></ul><ul><li>Consumer has </li></ul><ul><ul><li>Purchased services or purchased, leased or rented products within the 18-month period preceding date of the telemarketing call </li></ul></ul><ul><ul><li>Made an inquiry or application about a product or service within 6-month period preceding date of telemarketing call </li></ul></ul><ul><ul><li>A written contract that is in existence or has expired within 18-month period preceding date of telemarketing call </li></ul></ul>Exemptions to National DNCL
    13. 13. <ul><li>Rule states </li></ul><ul><ul><li>“… express consent has been provided by such consumer to be contacted via a telemarketing telecommunication…” </li></ul></ul><ul><li>Part V of the rules describes acceptable forms </li></ul><ul><ul><li>Written, including a completed application form </li></ul></ul><ul><ul><li>Oral </li></ul></ul><ul><ul><li>Electronic via toll-free number or Internet </li></ul></ul><ul><ul><li>Other methods if record created by consumer or third party </li></ul></ul><ul><li>Onus on telemarketer and client of telemarketer to prove </li></ul>Express Consent
    14. 14. New unsolicited telemarketing rules <ul><li>Will apply to all telemarketers even if they are exempt from the National DNCL Rules   </li></ul>
    15. 15. New unsolicited telemarketing rules <ul><li>Telephone Calls: </li></ul><ul><ul><li>Calling hours addressed for first time </li></ul></ul><ul><ul><ul><li>Restricted to 9 am-9:30 pm Monday-Friday </li></ul></ul></ul><ul><ul><ul><li>10 am-6 pm Saturday-Sunday </li></ul></ul></ul><ul><ul><li>At beginning of a call a telemarketer must identify: </li></ul></ul><ul><ul><ul><li>Name or fictitious name of the individual placing call </li></ul></ul></ul><ul><ul><ul><li>Name of telemarketer whether calling on its own behalf or on behalf of a client of telemarketer </li></ul></ul></ul><ul><ul><ul><li>Provide the purpose of call (if call is exempt from the National DNCL Rules) </li></ul></ul></ul>
    16. 16. New unsolicited telemarketing rules <ul><li>Upon request, telemarketer must provide: </li></ul><ul><ul><li>local or toll-free number allowing customer access to speak to an employee or other representative of the telemarketer and where applicable, its client </li></ul></ul><ul><ul><li>name and address of an employee or other representative of the telemarketer and where applicable, its client, to whom the consumer can write </li></ul></ul>
    17. 17. New unsolicited telemarketing rules <ul><li>For any telephone numbers provided to a consumer, the call: </li></ul><ul><ul><li>Shall be answered either by a live operator or voicemail system to take messages for the consumer </li></ul></ul><ul><ul><ul><li>Voicemail must inform consumers that their call will be returned within 3 business days </li></ul></ul></ul><ul><ul><ul><li>Telemarketer or client of telemarketer must return consumer's call within 3 business days </li></ul></ul></ul>
    18. 18. New unsolicited telemarketing rules
    19. 19. New unsolicited telemarketing rules <ul><li>Telemarketers must display originating calling number or alternate number where call originator can be reached (except where number display is unavailable for technical reasons) </li></ul><ul><li>Sequential dialling prohibited </li></ul><ul><li>Random dialling and calls to non-published numbers are permitted, except to numbers registered on National DNCL; are emergency lines; and are associated with healthcare facilities </li></ul>
    20. 20. New unsolicited telemarketing rules <ul><li>DNCLs are to be maintained by the telemarketer on its own behalf or on behalf of a client of a telemarketer and remain active for 3 years effective within 31 days from the date of the consumer's do not call request </li></ul><ul><ul><li>Consumer shall not be asked to call elsewhere to make their request </li></ul></ul>
    21. 21. New unsolicited telemarketing rules <ul><li>A telemarketer using a predictive dialling device to initiate a call shall not exceed, in any calendar month, a 5% abandonment rate </li></ul><ul><li>Telemarketer and/or its client shall maintain records of actual abandonment rates for a period of 3 years from the date each monthly record is created </li></ul>
    22. 22. New unsolicited telemarketing rules <ul><li>Fax marketing calls </li></ul><ul><ul><li>Restricted calling hours </li></ul></ul><ul><ul><li>Fax must include following information at top of first page in 12 pt. font size or larger </li></ul></ul><ul><ul><ul><li>Name of telemarketer; originating date and time of fax </li></ul></ul></ul><ul><ul><ul><li>Local or toll-free number voice and fax number allowing the customer access to an employee or other representative of the telemarketer, and where applicable, the client of the telemarketer, for the purpose of asking questions or making a DNC request </li></ul></ul></ul><ul><ul><ul><li>Name and address of an employee or other representative of the telemarketer, or client where applicable, to whom the consumer can write </li></ul></ul></ul>
    23. 23. New unsolicited telemarketing rules <ul><li>Fax telemarketing calls </li></ul><ul><ul><li>Sequential dialling prohibited </li></ul></ul><ul><ul><li>DNCLs are to be maintained by the telemarketer as per voice-based calls </li></ul></ul>
    24. 24. New unsolicited telemarketing rules <ul><li>Automatic Dialling and Announcing Devices used for the purpose of solicitation are prohibited </li></ul><ul><li>  </li></ul><ul><li>Penalties for violations </li></ul><ul><ul><li>Up to $1,500 for individuals and up to $15,000 for corporations per violation </li></ul></ul>
    25. 25. Enforcement <ul><li>Due diligence is a valid defence </li></ul><ul><li>Who can be held liable for violations? </li></ul><ul><ul><li>Telemarketers who telemarket on behalf of themselves </li></ul></ul><ul><ul><li>Telemarketers who telemarket on behalf of clients </li></ul></ul><ul><ul><li>Clients of telemarketers provided there is an agent/mandatary relationship </li></ul></ul>
    26. 26. <ul><ul><li>Establish internal working group – where best resides? </li></ul></ul><ul><ul><li>Revise consumer agreements and or applications </li></ul></ul><ul><ul><li>Revise contracts with suppliers </li></ul></ul><ul><ul><li>Revise scripts for telemarketers for identification requirements and internal DNC handling </li></ul></ul><ul><ul><li>Implement toll free or local number </li></ul></ul><ul><ul><li>Modify telemarketing fax rules – i.e.12 point font, etc. </li></ul></ul><ul><ul><li>Prepare for list download and new record keeping </li></ul></ul><ul><ul><li>Need for employee training and communication plan </li></ul></ul>What you need to do – the basics
    27. 27. <ul><li>For more information: </li></ul><ul><li> </li></ul><ul><li>Telecom Decision 2007-48 </li></ul><ul><li> </li></ul><ul><li>Telecom Decision 2008-6 </li></ul><ul><li> </li></ul><ul><li>Nancy Webster Cole </li></ul><ul><li>Senior Manager, Telemarketing Regulations </li></ul><ul><li>[email_address] </li></ul><ul><li>819-934-6377 </li></ul>
    28. 28. Responsible Self-Regulation <ul><li>CMA Code of Ethics & Standards of Practice </li></ul><ul><ul><li>One of the strongest protections for marketing in Canada </li></ul></ul><ul><ul><li>Goes beyond the law </li></ul></ul>
    29. 29. CMA rules for telemarketing <ul><li>Caller Identification </li></ul><ul><li>Restricted calling hours </li></ul><ul><li>Abandonment rates </li></ul><ul><li>Call recording </li></ul><ul><li>Internal DNCs </li></ul><ul><li>Mandatory member use of CMA Do Not Contact Program </li></ul>
    30. 30. CMA’s Do Not Contact Program <ul><li>However, NDCL will impact CMA Do Not Contact Program </li></ul><ul><ul><li>Current registrants signed up for 3 years </li></ul></ul><ul><ul><li>No new registrations after NDNCL launch </li></ul></ul><ul><ul><li>Numbers not being transferred to NDNCL </li></ul></ul><ul><ul><li>Run off the program over the 3 years </li></ul></ul><ul><ul><li>CMA’s Do Not Mail will continue </li></ul></ul>
    31. 31. -- Telemarketing -- The New Regulatory Environment Wally Hill Vice-President Communications & Public Affairs Canadian Marketing Association Canadian Circulation Managers Association June 9, 2008