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CRTC Steps Up Enforcement Action

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Earlier this month, the Canadian Radio-television and Telecommunications Commission (CRTC) announced that it had concluded a five-month investigation and has taken enforcement action against 85 companies for violating Unsolicited Telemarketing Rules.

In stepping-up its enforcement action, the CRTC issued citations to 74 companies who were engaged in telemarketing activity but who would fail to register with the National Do Not Call List operator or to subscribe to the National Do Not Call List.  The National Do Not Call List which allows Canadians to register their telephone and fax numbers in order to opt-out of being contacted by telemarketers.

Another 11 companies were assessed administrative monetary penalties for violating the Unsolicited Telemarketing Rules. The aggregate administrative monetary penalties assessed by the CRTC for these 11 companies was $41,000. The amount reflects that in each case the company that had failed to comply with the Unsolicited Telemarketing Rules appears to have been a relatively small business.

Small businesses should be aware that even though the costs of compliance with the Unsolicited Telemarketing Rules may be material; all telemarketers must exercise diligence in complying with and with demonstrating compliance with the Rules.  For example, if the company wishes to rely on the exemption that applies to telemarketing calls to a person with whom the company has an existing business relationship, the company must be able to demonstrate the one of the following: (i) a contract was concluded with person who was contacted or a contract with that person had expired in the 18-month period preceding the telecommunication; or (ii) the person who was contacted had made an inquiry of the company or an application within the six-month period preceding the telecommunication. In order to defend itself, therefore, the company must maintain accurate records that can be produced on demand to the CRTC.

If the existing business relationship exemption, or another exemption, does not apply to the telecommunication, the company must register with the Do Not Call List operator and download the Do Not Call List once every 31 days. All businesses engaged in telemarketing activity (including small businesses) must, therefore, invest in sufficient computer technology to be able to utilize the Do Not Call List to screen out persons who do not wish to receive unsolicited telecommunications.