Archive for the 'Advertising' Category
In an interesting case earlier this week, the CRTC announced that it had taken enforcement action against two India-based firms for breaching Canadian telemarketing laws under the National Do Not Call List (DNCL).
The CRTC ordered Pecon Software Ltd. and Avaneesh Software Private Limited to stop their current telemarketing practices and pay $507,000 in penalties. A parallel investigation in the United States by the Federal Trade Commission (FTC) has targeted 14 corporate defendants and 17 individuals in 6 legal filings (Pecon Software Ltd., Finmaestros LLC, Zeal IT Solutions Pvt. Ltd., Virtual PC Solutions, Lakshmi Infosoul Services Pvt. Ltd. and PCCare247 Inc., as well as a number of individual defendants).
According to the CRTC, in this scam dubbed the “Microsoft imposter” scam, telemarketers from the Indian firms would typically warn consumers that their personal computers were infected with viruses attempting to sell anti-virus software or technical support. The telemarketers allegedly claimed they were affiliated with legitimate companies, including Microsoft, Dell, McAfee and Norton, telling consumers that they had detected malware that posed an imminent threat to their computers, falsely demonstrating an infection then offering to remove the malware for fees that ranged from $49 to $450.
In making the announcement, the CRTC said:
“Foreign-based telemarketers have been put on notice that they must comply with our rules when calling Canadians,” said Andrea Rosen, the CRTC’s Chief Compliance and Enforcement Officer. “Canadians who receive these types of unsolicited calls are encouraged to file a complaint and should never give an unsolicited caller access to their computers or personal information.”
International Cooperation
According to the CRTC, it also conducted inspections as part of its investigation and worked with other international agencies including the U.S. Federal Trade Commission (see: FTC Halts Massive Tech Support Scams) and Australian Communications and Media Authority (ACMA) (see: Global action busts scammers posing as Microsoft).
The ACMA said that this scam, which targeted consumers in Canada, the United States, Australia, Ireland, New Zealand and the U.K., generated almost 10,000 calls to its Do Not Call complaint line over the past two years (and at its peak representing about 50% of all complaints it received). The FTC obtained court orders to stop six alleged tech support scams and has frozen the target firms’ assets.
The enforcement agencies involved in this case are also saying that, in an attempt to avoid detection, the telemarketers used some 80 different domain names and 130 phone numbers.
Regulation of Telemarketing in Canada
Canada’s DNCL is part of the CRTC’s Unsolicited Telecommunications Rules, which include the Telemarketing Rules, DNCL Rules and Automatic Dialing and Announcing Device Rules.
Gift cards are a type of stored-value payment card issued by retailers that are preloaded with a specific value for future purchases. These include cards that can be used at a particular store or retailer, cards redeemable at a chain or mall and credit card branded cards that can be used wherever a particular brand of credit card is accepted.
There are two main types of gift cards: “open loop” and “closed loop” cards. Open loop gift cards can be used anywhere (e.g., in any store in a shopping mall). Closed loop gift cards can only be used at a particular store, location or chain.
Gift cards are primarily regulated by provincial legislation, although some federal legislation can also apply (e.g., the misleading advertising provisions of the federal Competition Act). Key aspects of provincial gift card regulation include rules relating to expiry dates, fees and the disclosure of key terms and conditions.
British Columbia introduced gift card legislation in 2008. In British Columbia, the Business Practices and Consumer Protection Act (“BPCPA”) and Prepaid Purchase Cards Regulation regulate prepaid purchase cards. Consumer Protection BC enforces British Columbia’s gift card legislation and regulations.
“Prepaid purchase cards” are defined as cards, written certificates or other vouchers or devices with a monetary value that are issued or sold in exchange for the future supply of goods or services to consumers, including gift cards and gift certificates.
In general, British Columbia’s gift card legislation prohibits expiry dates and fees (except in certain circumstances), requires suppliers to disclose certain prescribed information (and sets out how that information must be disclosed) and gives gift card purchasers certain refund and other rights where the legislation is not complied with.
On September 28, 2012, the Competition Bureau published its September In Brief newsletter, which includes recent announcements of the appointment of John Pecman as Interim Commissioner of Competition, publication of the Bureau’s final Abuse of Dominance Guidelines, commencement of its new misleading advertising suit against Bell, Rogers and TELUS and update on its abuse of dominance challenge against Canada’s largest real estate board, The Toronto Real Estate Board (TREB).
The Bureau also announced a joint Internet fraud sweep together with members of ICPEN (the International Consumer Protection and Enforcement Network), which targeted deceptive and fraudulent advertising in the “rapidly growing online and mobile markets.” In making the announcement, the Bureau indicated that it was focused on undisclosed fees and hidden terms (themes consistent with its recent challenge of Bell/Rogers/TELUS – see: here):
CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
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Social media is increasingly important for effective marketing and promotion, including the operation of contests. Contest organizers should be aware, however, that there can be specific terms of use that apply to the promotion and administration of a contest using social media.
The Competition Bureau has updated its organizational chart with John Pecman (formerly head of the Criminal Matters Branch) as Acting Commissioner of Competition. From the Bureau:
“John Pecman is Acting Commissioner of Competition.
The Commissioner is responsible for the administration and enforcement of the Competition Act and three labelling statutes, the Consumer Packaging and Labelling Act, the Precious Metals Marking Act and the Textile Labelling Act.
Under the Competition Act, the Commissioner can launch inquiries, challenge civil and merger matters before the Competition Tribunal, make recommendations on criminal matters to the Director of Public Prosecutions of Canada (DPP), and intervene as a competition advocate before federal and provincial bodies.
As head of the Canadian Competition Bureau, the Commissioner leads the Bureau’s participation in international fora such as the Organization for Economic Cooperation and Development (OECD) and the International Competition Network (ICN), to develop and promote coordinated competition laws and policies in an increasingly globalized marketplace.
CANADIAN CASL (ANTI-SPAM LAW) PRECEDENTS
Do you need a precedent or checklist
to comply with CASL (Canadian anti-spam law)?
We offer Canadian anti-spam law (CASL) precedents and checklists to help electronic marketers comply with CASL. These include checklists and precedents for express consent requests (including on behalf of third parties), sender identification information, unsubscribe mechanisms, business related exemptions and types of implied consent and documenting consent and scrubbing distribution lists. We also offer a CASL corporate compliance program. For more information or to order, see: Anti-Spam (CASL) Precedents/Forms. If you would like to discuss CASL legal advice or for other advertising or marketing in Canada, including contests/sweepstakes, contact us: contact.
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September 23, 2012
I’ve been seeing an increasing flutter of updates and newsletters recently discussing the status of Canada’s new (though still unclear when) anti-spam legislation (“CASL”). So I thought I would have a poke around the web, see what Industry Canada, the CRTC, the Competition Bureau and Privacy Commissioner’s office have been up to lately and post a few thoughts on the progress of the new law that is inching along, some recent developments and practical steps that can be taken before the law is in force.
In speaking to some industry groups recently, I’ve had some questions about provincial licensing requirements for telemarketing (and who the rules apply to and the basic requirements).
Most companies engaged in telemarketing (as well as the agencies and lawyers assisting and advising them) will already be well aware of the federal requirements under the Competition Act and National Do Not Call List (see: Telemarketing).
Less well known, I’ve recently found, is the fact that in British Columbia, a third level of regulation may apply: the Telemarketer Licensing Regulation (the “Telemarketer Regulation”) under the British Columbia Business Practices and Consumer Protection Act (“BPCPA”).
In general, all telemarketers conducting business in British Columbia (or contacting British Columbia consumers by phone or fax) to enter distance sales contracts are subject to the Telemarketer Regulation. The Regulation also applies to telemarketers that contact BC consumers to solicit consumers for contributions on behalf of 3rd party suppliers – for example, 3rd party fundraisers.
“Distance sales contracts” are defined as: “contracts for the supply of goods or services between a supplier and a consumer that [are] not entered into in person and, with respect to goods, for which the consumer does not have the opportunity to inspect the goods that are the subject of the contract before the contract is entered into, but does not include a prepaid purchase card.”
Telemarketers are required to have licences for each location (which must be displayed), fulfill certain reporting obligations (including new employee identity and contact information and changes in senior officers or corporate control) and are subject to record-keeping requirements (including customer names and contract details).
The Telemarketer Regulation also limits the days and times for telemarketing calls and the frequency and manner of calls (for example, telemarketers cannot call on statutory holidays, outside of specified hours during weekdays or on weekends or block their numbers).
Exemptions from the licensing requirement include charities, educational institutions, banks and credit unions, political organizations and survey firms.
For more information about the provincial licensing and regulation of telemarketers in British Columbia see: Consumer Protection BC – Telemarketing Portal, Do Not Call – Telemarketers, Charities and Telemarketing – Avoiding Scams, Telemarketer Licensing Regulation, Telemarketing in BC – The Basics, Questions to Ask a Telemarketer.
We help individuals and companies comply with Canadian advertising and marketing laws, including Canada’s telemarketing laws.
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Last week the Advertising Standards Canada released its fourth annual Compliance Report on the Canadian Children’s Food and Beverage Advertising Initiative (see: Advertising Standards Canada releases 2011 Compliance Report on Canadian Children’s Food and Beverage Advertising Initiative).
The Initiative was launched by members of Canada’s food and beverage industry in 2007 in an effort to shift the landscape of advertising directed to children under 12 to the promotion of “better-for-you products”.
Under this Initiative, which includes advertising in all major media (as well as children focused media such as video, computer games and DVDs), participants have committed to either not direct advertising primarily to children under 12 or shift advertising to promote products that are “consistent with the principles of sound nutrition guidance.” The Initiative includes specific nutrition criteria (e.g., foods that reflect the dietary guidelines of Canada’s Food Guide or nutrient content claims of the Canadian Food Inspection Agency’s Guide to Food Labelling and Advertising). Participants in this initiative have also agreed to certain other commitments, such as reducing the use of 3rd party licensed characters used to promote non-Initiative approved products, not advertising in elementary schools or paying for product placements in programs directed at children.
According to the ASC, some participants have stopped child-directed advertising altogether (the 19 food and beverage company participants include Burger King, Campbell’s, Coke, General Mills, Hershey, Kellogg, Kraft, Mars, McDonald’s, Nestle, Pepsi, Post, Unilever and Weston). Others have launched new “better-for-you” advertising initiatives. No product in the ASC’s Initiative is more than 200 calories and every meal is less than 600 calories.
The regulation and self-regulation of food and children’s advertising and labeling is governed in Canada by, among other things, the federal Competition Act, Food and Drugs Act and Consumer Packaging and Labelling Act, as well as the Canadian Food Inspection Agency’s Guide to Food Labelling and Advertising and the ASC’s Broadcast Code for Advertising to Children and Canadian Code of Advertising Standards (which contains specific rules relating to advertising for children).
For a copy of the ASC’s new report see: Canadian Children’s Food & Beverage Advertising Initiative.
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For more information about our regulatory law services: Contact
For more regulatory law updates follow us on Twitter: @CanadaAttorney
Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
