MCMILLAN BINCH
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Advertising &
The “411” On Telemarketing In Canada
Marketing
Bulletin
A Report on Recent
Developments in Advertising
& Marketing Law
December 2003
The sad truth for telemarketers is that many consumers have begun to resent the
intrusive tactics employed by a small number of players in the industry.
Lawmakers are growing increasingly aware of this trend and are eager to score
political points by introducing proposals that would see the telemarketing
industry governed by more rigorous rules.
Recent US Developments: The “Do Not Call” Registr
y
Registry
In October 2003, the US Federal Trade Commission (FTC) launched a national
“Do Not Call” registry. Individuals can choose to add their home and mobile
telephone numbers to the registry, free of charge, by joining online or by
telephone. Telemarketers, in turn, are required to buy copies of the list and to
purge their internal marketing databases of registered numbers within three
months of the date a consumer joins the registry. If a telemarketer calls a number
that has been registered, the consumer may file a complaint with the FTC and the
telemarketer could face a fine of up to US$11,000 per call.
There are exemptions for charities, surveys and political canvassers, as well as for
organizations with which a consumer has an established business relationship.
The “Do Not Call” registry has proven to be enormously popular with consumers,
with over 54 million telephone numbers (out of an estimated 166 million
residential telephone numbers in the US) registered to date. Telemarketers are
currently challenging the FTC’s ability to maintain and enforce the terms of the
registry on the basis of freedom of speech, and the outcome of this legal challenge
remains uncertain.
Laws and Regulations Governing Telemarketing in
Canada
Voluntary “Do Not Contact” Initiatives
The Canadian Marketing Association (CMA) administers a “Do Not Contact
Service” under which consumers may register with the CMA to have their names
removed from the direct mail and telemarketing lists maintained by CMA
members. The CMA has also adopted a Code of Ethics and Standards of Practice that
requires telemarketers to, among other things, observe the following rules:
• limit the timing of outbound calls to the hours of 9:00 a.m. to 9:30 p.m. on
weekdays and from 10:00 a.m. to 6:00 p.m. on weekends (with no calls to be
made on statutory holidays); and
• not knowingly contact a consumer (who is not already a current customer) more
than once per month for the same product or service.
While the CMA does take complaints from consumers, it is not a government
body and has no disciplinary authority over non-members.
Telemarketing and CRTC Regulations
The Canadian Radio Television and Telecommunications Commission (CRTC)
regulates the use of the telephone to market goods and services to consumers in
Canada under the authority of the Telecommunications Act.
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According to CRTC Order 2001-193 and the General
Tariff, Item 1800, a telemarketer must remove a
consumer’s name and telephone number from its
internal marketing list within 30 days of receiving a
request from the consumer to do so. This request must
remain on file for at least three years. If a telemarketer
calls a consumer who has previously indicated to that
organization that he or she does not wish to receive
further calls, the telemarketer’s phone service may be
suspended or terminated.
The CRTC has also set out a number of other
telemarketing restrictions, including the following:
• telemarketers must identify the person or
organization on behalf of whom the call is being
made;
• the originating calling number (or an alternate
number) must be displayed unless technical reasons
prevent the telemarketer from doing so;
• random dialling and calls to non-published numbers
are allowed, but sequential dialling is not permitted;
and
• telemarketers may not make calls to emergency lines
or to health care facilities.
There are no calling hour restrictions on live voice
telemarketing, but special rules apply to telefaxing and
to the use of automatic dialling and announcing devices
(ADADs) that deliver pre-recorded or synthesized voice
messages.
Telemarketing and the Competition Act
Amendments made to the Competition Act (the Act) in
1999 specifically address certain telemarketing
practices.
Telemarketing representations that are false or
misleading in a material respect are prohibited and
those persons who engage in this type of conduct are
liable to prosecution by the Competition Bureau.
The Act requires that the telemarketer disclose the
following information to the consumer in a fair and
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reasonable manner at the beginning of each telephone
communication:
• the identity of the person on behalf of whom the
communication is being made;
• the nature of the product or business interest being
promoted; and
• the purposes of the communication.
In addition, unless the information has been previously
provided to the consumer within a reasonable amount of
time before the call, or if the information is otherwise
requested by the consumer during the call, the
telemarketer must disclose the following information in
a fair, reasonable and timely manner at some point
during the telephone communication:
• the price of the product being promoted; and
• any material restrictions, terms or conditions
applicable to the delivery of the product.
Drawing Conclusions: How to A
void
Avoid
a “Wrong Number” in a
Telemarketing Campaign
Whether outsourced or conducted in-house, a
telemarketing campaign should be carefully managed
from the start to ensure compliance with all legal
requirements. The use of telemarketing scripts
identifying the organization on behalf of whom the call
is made and the purpose of the call is essential.
Telemarketers should also provide proper training for
call centre employees, emphasizing the need to avoid
making false, misleading or deceptive representations
about the product or service being offered.
As of January 1, 2004, all telemarketers will also have to
consider whether their marketing lists have been created
in accordance with applicable privacy laws.
Telemarketers should monitor conversations to ensure
consistency in the application of the policies and
procedures adopted for the campaign. Most importantly,
consumer requests not to be contacted by the
telemarketer in the future should be honoured and
properly recorded.
Written by: Bill Hearn
The foregoing provides only an overview. Readers are cautioned against making any decisions based on this
material alone. Rather, a qualified lawyer should be consulted.
For further information, please contact your McMillan Binch LLP lawyer or one of the
Practice Leaders of our Advertising & Marketing Group listed below:
Sharon E. Groom
Bill Hearn
416.865.7152
416.865.7240
sharon.groom@mcmillanbinch.com
bill.hearn@mcmillanbinch.com
© Copyright 2003 McMillan Binch LLP
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