An online poll suggests 54 per cent of Canadians would consider taking legal action for violations of Canada’s anti-spam legislation.
That response seems to be fuelled by numbers that show almost 60 per cent say they haven’t received less spam since the legislation came into effect on July 1, 2014.
Although the Canadian Radio-television and Telecommunications Commission has issued fines to a number of companies for violations, Canadians will be able to file lawsuits against businesses for violations when the transition period ends on July 1, 2017.
Conducted by Google Consumer Surveys in August for Toronto-based itracMARKET, a software company that provides compliance tools for businesses, the poll is based on 1,000 responses from across the country.
“We clearly do expect there will be opportunistic litigation and we expect it will be in the form of class action lawsuits,” says Martin Kratz, a partner at Bennett Jones LLP in Calgary.
Kratz says part of the problem for companies is the “considerable ambiguity” about how the law works because of the complex interaction between the exemptions in place, the regulations, and the act itself.
“The law itself is horribly complex to operate within,” he says.
In the CRTC enforcement actions so far, where there was no consent to the messages and where large volumes of messages were blasted out and unsubscribe requests were ignored, Compu-Finder faced a $1.1-million fine. The CRTC has also gone after technical violations by Porter Airlines, which faced a fine of $150,000 for failing to have an unsubscribe mechanism in place. In addition, online dating site Plenty of Fish faced a $48,000 fine for failing for the lack of prominence of its unsubscribe mechanism.
“It’s going to take some litigation to explore what all the boundaries are,” says Kratz.
Having a solid compliance program is important to help combat legal action, he says. Before pressing send, prudent marketers should make sure their systems are checking outgoing message recipients against their permissions list.
“Behind your mechanism for collecting permissions, you need to have a robust customer relationship management system,” he says.
Companies that may have taken an expedited compliance approach might want to take a harder look at their electronic communications activities as due diligence is a defence, Kratz adds.
“It’s important to address technical compliance requirements as well as the business elements of a compliance program.”
When it comes to why Canadian continue to see so much spam, it could be some people are confusing international and U.S.-based spam as many American companies may still be unaware that Canada has a strict regime. In the United States, the law is that the first message is allowed but the company has to identify itself and honour an unsubscribe action from a consumer. In Canada, the first improper message is a violation.
When asked what legitimate industries are the worst spam e-mail offenders, most survey participants said retailers were at the top at 38.1 per cent, followed by group-buy sites at 34.1 per cent, and travel sites at 30.3 per cent. Restaurants were the lowest at 8.9 per cent.
Kratz says his impression is that retailers are “highly aware of the law” and want to be fully compliant.
In some cases, however, retailers may not know what those administering their e-mail campaigns are doing.
“I have a sense a lot of companies are still doing nothing or they’re doing things wrong,” says Steve Szentesi of Steve Szentesi Law PC, a competition and advertising lawyer in Toronto.
He says some clients he has spoken to still want to take the chance on not being compliant or he sees that retailers are outsourcing their e-mail marketing to agencies that aren’t producing compliant programs.
“From a lawyer’s perspective, it’s surprising,” he says.
Advertising agencies that work with many brands are in some cases drafting terms and conditions for promotions and the compliance they came up with was “completely wrong.”
“The message is that companies are aware of it but in some cases don’t want to do anything or they are aware but are doing things wrong,” says Szentesi. “A lot of [ad] agencies field the legal advice for their clients.”
Once the private action regime is in force in July 2017, it could be open season on companies that have failed to comply.
“I think plaintiff’s counsel are essentially building cases against companies that are clearly doing it wrong,” says Szentesi.
Szentesi predicts there will be a significant amount of private enforcement.
“The damages are $200 per infraction, so $200 per e-mail up to $1 million a day. It’s just too easy to bring the cases after 2017. They may have a sense it’s theoretically severe, but we haven’t seen the CRTC do a lot in the first year and a half. I think the plaintiff’s counsel are going to be much more aggressive.”
