A. INTRODUCTION
On July 3, 2007 the Canadian Radio-Television and Telecommunications
Commission ("CRTC") released Telecom Decision CRTC
2007-48 ("Decision 2007-48"). This Charity Law
Bulletin ("Bulletin") summarizes aspects of
that decision that are relevant to charities and provides
an update to Charity Law Bulletin No. 46, posted in
June 2004, which provided an overview of the details of Telecom
Decision CRTC 2004-35 ("Decision 2004-35"), that
originally introduced the telemarketing rules.
B. BACKGROUND
Decision 2004-35, released in May 2004, established restrictions
on unsolicited live voice and fax calls made for the purpose
of solicitation, including requirements of self-identification,
restrictions on the hours for fax calls, compulsory provisions
for delisting recipients, prohibitions against sequential
dialling and prohibitions on calls to emergency lines and
healthcare facilities. The application of these restrictions
made no exception for charitable organizations. Decision 2004-35
also discussed the potential for a National Do Not Call List
("DNC list"), but the potential for this was dismissed
because there was no legislative basis for the CRTC to have
any capacity for its enforcement.
Decision 2004-35 was stayed by the CRTC in September, 2004,
following an application by the Canadian Marketing Association
("CMA") for the decision's review and variance.
All of the restrictions in Decision 2004-35 were stayed except
for the requirement that telecommunications service providers
track and report their complaint statistics. That requirement
became effective on January 1, 2005.
CMA's application was later accompanied by the application
of three other organizations, each requesting that Decision
2004-35 be stayed, reviewed, rescinded, and/or varied. One
of the additional applicants was the Association of Fundraising
Professionals ("AFP"). AFP is an organization of
professional fundraisers who raise funds on behalf of a wide
variety of charities. AFP raised several specific concerns
about the burdensome impact that the restrictions in Decision
2004-35 could have on charitable organizations.
In their submissions, AFP requested that the CRTC vary Decision
2004-35 by exempting charitable organizations from the telemarketing
restrictions and rules,1 submitting
that Decision 2004-35 failed to strike a reasonable balance
between the charitable sector's need to raise funds efficiently
and the public's need to be free from undue intrusiveness.
AFP suggested that Decision 2004-35 would prove extremely
burdensome to many charities, resulting in a significant loss
of organizational capacity and funding.2 Noting that charitable
organizations are in a unique position, AFP suggested that
there is a manifest difference between a charity contacting
a potential donor for a contribution and a for-profit corporation
contacting a potential buyer for a product.3
In November 2005, Bill C-37, An Act to amend the Telecommunications
Act4 received Royal Assent.
This Act came into force in June of 2006 and amended the Telecommunications
Act5 (the "Act"),
granting the CRTC the necessary powers to establish and enforce
a DNC list, and also providing an exemption for charitable
organizations registered under s. 248 (1) of the Income
Tax Act from the DNC list requirements.
In February 2006, before the legislative amendments to the
Act came into force, the CRTC released Telecom Public Notice
CRTC 2006-4 ("Notice 2006-4"). Notice 2006-4 initiated
a public proceeding and consultation regarding the DNC list,
the telemarketing rules and the disposition of the review
of Decision 2004-35. Decision 2007-48, which was released
in July 2007, represents a response to the CRTC's consultation
and review.
C. DECISION 2007-48
There are three primary issues the CRTC focused their attention
towards in Decision 2007-48. The first issue was the establishment
of a DNC list. The second issue was possible reforms to the
telemarketing rules originally outlined in Decision 2004-35
and various other regulations. The third issue was the need
for an investigation of complaints process for the violation
of both the DNC list and the telemarketing rules. The following
overview briefly outlines several of the changes outlined
in Decision 2007-48.
1. The establishment of a National Do Not Call List
For telemarketers in general, the most relevant portion of
Decision 2007-48 was the establishment of rules and guidelines
for a DNC list. The purpose of this list is "to provide
consumers with an effective and efficient means of preventing
unwanted telemarketing telecommunications from as many telemarketers
or clients of telemarketers as possible."6 The rules and
guidelines for the DNC list outlined in Decision 2007-48 have
the potential to severely restrict the current abilities of
telemarketers throughout Canada.
In accordance with Parliament's amendments to the Act, the
CRTC chose to extend charitable organizations registered under
s. 248 (1) of the Income Tax Act an exemption to the
rules of the DNC list. A registered charity will not be required
to subscribe to the DNC list, nor can they be found to have
violated the DNC list rules or guidelines. This exemption
does not extend to non-registered charities or the non-registered
affiliates of registered charities. Any charitable organization
or organization affiliated with a charity that is not registered
under the Income Tax Act must subscribe to the DNC
list and abide by its rules and guidelines.
Under Decision 2007-48, the DNC list allows consumers who
prefer not to receive unsolicited calls to register their
home telephone, wireless telephone, or fax number for a period
of three years. During the time their number is registered,
telemarketers will be prohibited from using it for telemarketing
save and except for a 31 day grace period beginning on the
day that the consumer registers their number.
Once the CRTC has selected an independent operator for the
DNC list and taken necessary steps for the list to be in operation,
all non exempt telemarketers and clients of telemarketers
must subscribe to the DNC list and pay the requisite subscription
fee prior to initiating any telemarketing telecommunication.
Complaints and violations will be handled by the DNC list
operator and prima facie violations will be referred to the
CRTC for the issuance of violation notices.
2. Telemarketing rules
In Decision 2007-48, the CRTC assessed the appropriateness
of each of the telemarketing rules introduced in Decision
2004-35. This assessment was done in light of the introduction
of a DNC list and the newly assigned powers of the CRTC, as
well as submissions made pursuant to the review of Decision
2004-35.
Within the applications to review and vary Decision 2004-35,
several organizations submitted that certain parties, including
charities registered under the Income Tax Act, who
enjoyed an exemption from the DNC list rules and guidelines
should also be exempt from telemarketing rules. CRTC refused
to accept these submissions. They specifically noted that
their definition of solicitation has always included charities
that solicit for cash donations, donations of goods and volunteer
time. Although fundraising falls under provincial jurisdiction,
telecommunications falls under federal jurisdiction and is
governed by the CRTC. The CRTC supports the conclusion that
"consumers do not consider telemarketing made by or on
behalf of charities to cause any less undue inconvenience
and nuisance, or to be less of an invasion of privacy, than
telemarketing made by or on behalf of for-profit organizations."7
The telemarketing rules considered in Decision 2007-48, and
those outlined below, apply to registered and non-registered
charitable organizations in equal application to all other
entities that conduct telemarketing.
a) Individual Do Not Call Lists
In reference to the do not call lists of individual telemarketers
and their clients, the CRTC recognized that while most consumers
who do not wish to receive calls will register for the DNC
list, consumers should still be provided the option of limiting
only specific telemarketers from using their number. The CRTC
also confirmed that amendments to the Act require organizations
exempt from the DNC list, such as registered charities, to
continue to maintain their own lists and honour consumer requests
not to be called.8
No changes were made to the requirement that requests to
be put on do not call lists should be processed immediately.9
With regard to the length and date of registration on these
lists, the CRTC determined that individual lists should have
the same 31 day grace period provided for the DNC list and
should similarly maintain the registration for a period of
3 years.10
The CRTC removed the requirement that a unique registration
number should be provided to consumers at the time they request
to be added to an individual do not call list. Telemarketers
are required, however, to provide a toll-free number that
consumers can call to verify their registration on that telemarketer's
individual do not call list.11
b) Caller Identification Requirements
The caller identification requirements that were part of
Decision 2004-35 received a great deal of attention in the
applications for variance. These requirements created an obligation
on telemarketers to immediately inform the consumer of certain
information at the beginning of a call. In reference to charities,
AFP specifically raised the importance for charities to be
able to identify their purpose in the first few seconds of
a call. Another organization suggested that the costs of the
caller identification requirements could result in such a
loss of revenue that not-for-profit organizations would be
at risk of closing their operations simply by implementing
the procedure.12
The CRTC removed the requirement that a toll free number
manned during business hours must always be provided to the
consumer at the beginning of a call. It was held instead that
a contact number must be provided but only when it has been
requested. They further indicated that the purpose of that
number must be for contacting an employee or representative
of the telemarketer to ask questions and make comments about
the telemarketing communication. This number must be either
local or toll-free.13 Although the decision removed the requirement
for a live operator, the number must be answered with a voicemail
system informing the consumer that his or her telephone call
will be returned within three business days. The telemarketer
must ensure that the consumer does not encounter a full mailbox.
The CRTC varied the requirement that the telemarketer must
immediately provide identification information before any
other communication and before asking for the desired individual.
This was replaced with the requirement that identification
information be provided only after the telemarketer has reached
the intended recipient of the telecommunication.14
The requirement that telemarketers provide the name of the
representative making the telecommunication, the name of the
telemarketer for which the representative is making the telecommunication
and, if applicable, the name of the client of the telemarketer
on behalf of which the telecommunication is being made was
maintained.15 Telemarketers
will also have to provide their name and address to a consumer
wishing to write down their concerns or complaints. Further,
the CRTC maintained the requirement that telemarketing by
fax must identify the telemarketer and client of the telemarketer
and include a voice and fax number and name of the person
responsible for sending the telecommunication in 12 font at
the top of the page along with the originating date and time
of the fax.16
Finally, utilization of call number display of the originating
telemarketing telecommunications number or an alternative
number where the telemarketer can be reached remains a requirement.17
c) Predictive Dialling Devices
The CRTC made no changes to the regulations surrounding the
restrictions on predictive dialling devices that were found
in Decision 2004-35. The CRTC did, however, develop clear
definitions for "predictive dialling devices", "abandoned
call" and "abandonment rate". Predictive dialling
devices include any device, system, or computerized software
that automatically dials telecommunications numbers. An abandoned
call is one placed by a predictive dialling device to which,
when answered by the consumer there is no live telemarketer
available to speak within two seconds, and the abandonment
rate means the percentage of telecommunications placed by
a predictive dialling device which are abandoned calls.18
3. Investigation of Complaints for Violation of Unsolicited
Telecommunications Rules
The DNC list rules and guidelines together with the telemarketing
rules constitute the unsolicited telecommunications rules.
Guidelines for handling consumer complaints about the violation
of the unsolicited telecommunications rules were outlined
in Decision 2007-48 after being made possible by the legislative
amendments to the Act that came into force in 2006. The chosen
DNC list operator will manage the actual filing of complaints.
However, the CRTC will maintain the role of investigator and
the issuer of notices of violation in monetary penalties.19
When a complaint has been filed, the CRTC will investigate
that complaint to determine whether a violation of the rules
has occurred. If a violation is found, the CRTC can determine
whether they will issue a notice of violation and/or impose
an administrative monetary penalty that can range from $1,500-$15,000
per violation.20
In making their determination, the CRTC will look to the
nature of the violation, the frequency of complaints and violations,
the relative disincentive of a monetary penalty and the potential
for future violation.
D. CONCLUDING COMMENTS
The denial of an exemption to the telemarketing rules for
charitable organizations that solicit donations is an obvious
disappointment to the charitable sector. Because of this,
charitable organizations must remain aware of the various
rules in Decisions 2005-35 and 2007-48. Specifically, these
organizations must ensure that they maintain their own do
not call list in the manner proscribed by the CRTC.
The CRTC confirmed the exemption of charitable organizations
from the DNC list rules as it was provided for when Parliament
amended the Act. The DNC list has the potential to cause a
tremendous adjustment for the telemarketing industry in general.
This exemption for registered charities means far less of
an adjustment for charitable organizations, as well as a greater
degree of potential for the solicitation of donations.
None of the changes implemented by decision 2007-48, including
the telemarketing rules, will be enforced until such a time
as the DNC list is established. In anticipation of this occurrence,
charities and their board of directors should review and implement
the rules to avoid the possibility of a consumer filing a
complaint of violation leading to a notice of violation or
a monetary penalty.
Decisions 2004-35 and 2007-48 can be viewed at: http://www.crtc.gc.ca/eng/welcome.htm.
1 See Application for the Association of Fundraising
Professionals to Review and Vary Telecom Decision CRTC 2004-35,
13 at http://www.crtc.gc.ca/PartVII/eng/2004/8662/a84_200410035.htm.
2 Ibid at 12.
3 Ibid at 47.
4 S.C. 2005, c. 50.
5 S.C. 1993, c. 38.
6 Canadian Radio-television and Telecommunications
Commission, Telecom Decision CRTC 2007-48: Unsolicited Telecommunications
Rules framework and the National Do Not Call List (July, 2007)
at 140.
7 Supra note 6 at 423.
8 Ibid at 250.
9 Ibid at 254.
10 Ibid at 258 and 260.
11 Ibid at 276.
12 Supra note 6 at 281-283.
13 Ibid at 303.
14 Ibid at 298.
15 Ibid at 312.
16 Ibid at 320
17 Supra note 6 at 327.
18 Ibid at 371.
19 Ibid at 497.
20 Ibid at 517.
