Due Diligence Defence and the Do-Not-Call List

by Dentons

Due Diligence Defence and the Do-Not-Call List

Earlier this month, the Canadian Radio-television and Telecommunications Commission (“CRTC”) released three decisions imposing administrative monetary penalties (“AMP”).

In one case, the CRTC imposed an AMP of Cdn. $18,000 on a company for (a) sending telemarketing fax to consumers whose fax numbers should have been on the company's internal do not call list and (b) telemarketing without being registered with the National Do Not Call List operator.  The CRTC rejected the company’s due diligence defence.  The company argued that its errors were not systemic.  However, the CRTC stated that the company did not submit evidence of steps it had taken or business practices it had adopted that would demonstrate due diligence in preventing calls to consumers whose numbers were or should have been on its internal do not call list.

In another case, the CRTC imposed an AMP of $8,000 for making telemarketing calls to consumers registered on the National Do-Not-Call List and for making telemarketing calls without having paid all applicable fees to the National Do-Not-Call List operator.  In rejecting the company’s due diligence defence, the CRTC noted that the company provided no evidence that it had developed a process to prevent unwanted calls.

In the final case, the CRTC affirmed a prior decision imposing an AMP of $6,000 for making telecommunications calls to consumers whose numbers were registered on the National Do-Not-Call List and for failing to register with and pay all fees to the National Do-Not-Call List operator.

These cases illustrate the importance of having a documented process for handling Do-Not-Call requests. Companies that do not use professional telemarketers may especially wish to review the CRTC Unsolicited Communications Rules. The Rules state that company wishing to establish a due diligence defence should be able to demonstrate that:

  • the company has established and implemented adequate written policies and procedures to comply with the Unsolicited Telecommunications Rules and to honour consumers’ requests that they not be contacted for telemarketing;
  • staff are provided with adequate on-going training;
  • the company is using a National Do-Not-Call List that is not more than 31 days old;
  • the company is using an Internal Do-Not-Call List that is no more than 31 days old;
  • the company has implemented a documented process to prevent telemarketing to a number that has been on the National or Internal Do-Not-Call List for more than 31 days;
  • the company monitors and enforces compliance with the Unsolicited Telecommunications Rules and the company’s written policies and procedures; and
  • in the case of a company that retains a third-party telemarketer, the company has entered into an agreement between itself and the telemarketer requiring the telemarketer to comply with the Unsolicited Telecommunications Rules.

Categories: Canada, Consumer Protection, Privacy


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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