Archive for the 'Telemarketing' Category
The past year has been a busy and eventful one for Canadian advertising and marketing law. Recent developments since 2010 span most key areas including the application of the “general misleading advertising” provisions of the Competition Act, the use of disclaimers, social media, e-mail marketing, performance claims and telemarketing.
At the same time, new legislation has been introduced that will impact how companies market in Canada, most notably the new federal anti-spam legislation (Bill C-28), and new cross-border enforcement initiatives were announced including a new international do-not-call enforcement network co-chaired by the CRTC.
These developments mean that it remains important for companies to effectively and efficiently navigate through Canadian advertising and marketing rules. Some of the more interesting and noteworthy developments in 2010 and 2011 are discussed below.
The federal Canadian Radio-television and Telecommunications Commission (CRTC) announced today that, together with the Australian Communications and Media Authority (ACMA), it has assembled 12 international enforcement agencies to form an International Do Not Call Network.
For the CRTC’s complete news release see: CRTC announces creation of international network to facilitate cooperation on telemarketing enforcement.
The members of this newly created Do Not Call Network are: Australia, Canada, France, Hong Kong, Ireland, Israel, Korea, Mexico, New Zealand, Spain, the UK and the United States.
Under the new international Do Not Call Network, the CRTC and ACMA will act as the Network’s inaugural co-chairs, with the U.S. Federal Trade Commission hosting the secretariat.
In making the announcement, the CRTC said:
“Enforcement agencies face a common challenge in tracking down individuals and companies who violate telemarketing rules, but operate outside national borders,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. ‘A global problem calls for global solutions. Having a network that fosters collaboration will contribute to more effective cross-border enforcement activities and help reduce unwanted telephone calls to Canadians from foreign telemarketers.’
The International Do Not Call Network will facilitate cooperation between agencies that enforce telemarketing rules in their respective countries. Members will meet annually to establish best practices and encourage the development of robust telemarketing laws around the globe. The network will also work to harmonize telemarketing policies between countries to improve enforcement activities across different jurisdictions.”
On December 15, 2010 Canada’s new anti-spam legislation received Royal Assent, which will, when it comes into force, be one of the strictest anti-spam regimes in the world:
An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act (the “Anti-spam Act”).
Earlier this Fall, consultations on two sets of draft Regulations concluded and so the new law may come into effect later this Fall or in the Spring of 2012 (see coming into force information below).
On October 3, 2011, the Competition Bureau announced that a deceptive telemarketer has been sentenced to two years in prison in relation to a deceptive telemarketing scheme involving the sale of business directories (see: Deceptive Telemarketer Receives a 2-year Prison Sentence).
This is the most recently announced telemarketing case by the Bureau, which shows that the criminal deceptive telemarketing and misleading advertising provisions of the Competition Act remain top enforcement priorities the Bureau. The case is also a recent illustration that, while relatively uncommon for competition law offences in Canada, the Bureau will not hesitate to seek prison sentences for what in its view are clearly intentional or fraudulent marketing law offences.
The Bureau has brought and sought penalties in a number of deceptive telemarketing cases in the past several years, many of which have involved the alleged cross-border deceptive marketing of business directories (see for example: Criminal Charges Laid in a Competition Bureau Telemarketing Case, Five Alberta Individuals Sentenced in Deceptive Telemarketing Scheme, Competition Bureau Sues to Shut Down Business Directory Scam, Competition Bureau Warns Against Deceptive Business Directories and Directors of Infotel Charged With Deceptive Telemarketing).
On August 30, 2011, the Competition Bureau announced that five individuals in Alberta were convicted and sentenced of deceptive telemarketing under the Competition Act.
In making the announcement, the Bureau stated:
“The individuals have been convicted of deceptive telemarketing under the Competition Act and of committing fraud over $5000 under the Criminal Code of Canada. The names of the individuals convicted and their respective sentences are:
Garther Cheung and Sukhraj Singh Chana, co-founders of the company, were each sentenced to one year for each of three counts of deceptive telemarketing and to two years in a federal penitentiary for committing fraud over $5,000, all time to be served concurrently.
Pritpal Chana and Ranjit Sangha, both managers of the company, were each sentenced to 16 months for each of three counts of deceptive telemarketing and 16 months for committing fraud over $5,000, all time to be served concurrently. The first eight months will be served as house arrest and the remaining eight months on probation.
Andrea Kyweriga, also a manager, was given a suspended sentence and placed on two years probation after being convicted of two counts of deceptive telemarketing and one count of fraud over $5000.
The five individuals are also prohibited from doing any act or thing that would be directed toward the deceptive telemarketing offence being committed or repeated for the next 10 years.
A sixth individual, Sarah Schaefer, pleaded guilty in 2007 and received a $15,000 fine.”
The Ontario Superior Court has imposed a record CDN $15 million fine against Toronto-based company DataCom Marketing Inc., which operated a business directory scam targeting U.S. and Canadian businesses.
According to the Competition Bureau:
“Toronto-based DataCom contacted thousands of small and medium-sized businesses between 1994 and 2005, tricking businesses into believing that they had already ordered a business directory listing and using deceptive scripts and aggressive collection tactics. Victims lost hundreds of dollars each while the scam netted $12.9 million in profits.”
Canada’s new Commissioner of Competition said:
“We applaud the court’s decision … This is a clear signal to fraudulent telemarketers that their acts will be treated seriously by the courts. In turn, we, at the Bureau, will not hesitate to take action against fraudulent telemarketers when we uncover evidence that the law has been violated.”
According to the Bureau, DataCom’s founder and former president had been previously sentenced to two years in jail, three years probation and was subject to a ten year ban on telemarketing activities.
This most recent deceptive telemarketing case both highlights the potentially significant penalties under the federal Competition Act and that deceptive marketing remains a top enforcement priority for the Competition Bureau.
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