Spam could lead to class actions

The survey is notable because on July 1, 2017, a section of the act permitting class-action lawsuits for CASL breaches becomes law.

“It’s a risk advisors need to think about,” warns Randy Sutton, a class-actions lawyer with Norton Rose Fulbright LLP in Toronto. “You want to start dealing with it now.”

CASL is a complex piece of legislation that imposes tight restrictions on “commercial electronic messages,” a term that is broadly defined, and requires advisors to show they have either express or implied consent from their clients or potential clients before they can send emails. The CRTC has been tasked with oversight of the CASL.

However, there are several exceptions in the law, which can be confusing for lay people – and that’s one of the problems, says Tim Banks, a privacy lawyer with Dentons LLP in Toronto, noting that he wasn’t surprised by the survey’s findings and the suggestion that “consumers are fed up with email marketing communications.”

However, he blames “unrealistic expectations that the CRTC put into the minds of Canadians in the lead-up to the implementation of the anti-spam legislation.

“What consumers think is spam is not necessarily spam under the legislation,” he notes. “The CRTC did a poor job, in my opinion, adjusting consumer expectations on what kind of emails businesses can legitimately send to them.”

For example, one of the exceptions involves “implied consent,” which can stem from existing business relationships or if consumers ask for information, provide their email address or make it conspicuously available. In those cases, express consent is not necessary, but consumers may not understand that, Banks says: “That’s not spam. Consumers think it’s spam and they complain about it.”

Since becoming law in July 2014, the CRTC has been swamped with complaints about spam and has taken enforcement action, including hitting Compu-Finder Inc. with a $1.1-million fine this past March. Under the law, fines can reach as much as $1 million per occurrence for an individual and as much as $10 million for a company. As well, company directors and officers can be held liable for the actions of employees.

Despite the heavy-handed spam law, the itracMEDIA survey reports that 59% of Canadians said the amount of spam they receive has not lessened, while almost 6% reported receiving more spam than before.

“Although most businesses made changes to their email communication process when the CASL laws were first introduced, they have allowed things to slide and simply aren’t prepared for the full impact of the legislation. July 1, 2017, is a hard line in the sand,” says Steve Vermeiren, vice president of customer success and marketing with itracMEDIA in a statement.

The company states that although 80% of clients it works with claim to be CASL-compliant, many are not.

Moreover, don’t expect the new Liberal federal government to step in and be a saviour by scrapping the plan to permit class actions, says Banks: “I would be very surprised if they touch it. There’s not much to be gained by a government making any significant changes to the legislation because you can see that consumers don’t necessarily want this type of communication or they don’t understand it.”

Sutton adds that the last thing you, as an advisor, need is to be caught up in a spam-related class-action lawsuit because cases of this nature are “time-consuming and expensive to deal with,” not to mention the hit that your reputation will take after being accused of spamming clients.

So, what can businesses do to protect themselves from a crippling class action? itracMEDIA has identified three common CASL mistakes that businesses make: failing to collect and manage permissions properly; failing to manage permission expiry dates for emails the firm has on record; and applying different standards to business vs consumer emails and managing them through different departments that don’t collaborate.

CASL “is fairly onerous legislation,” Sutton says, adding that this is why it’s important to “have a consistent process in place to ensure what emails are going out and to whom.”

If you are sued, he says, you will need to be able to prove either express or implied consent to defend the case.

“From an evidentiary perspective, you need to be able to track that you have the consent for the emails that you send,” Sutton says. “People may not be as far along as they should be on that.”

Given the negative view Canadians have of spam, you need to review your communication efforts, Banks says: “Think about the expectation of the recipients of the communications and decide whether you really should be relying on a program of express consent, consistent with the expectations of the recipients [rather than implied consent].”

Banks adds that you need to “make sure your [consents] are up to date” and that “you can gather them in a short period of time. You need to make sure your Ts’ are crossed and your Is are dotted” in the event you are sued.

What’s “really dangerous,” he points out, is relying on outdated email lists, with which you can’t trace how you acquired the OK to send recipients digital communications. Make sure that you have a way for recipients to unsubscribe to emails and a method for tracking such requests,

The time to act is now, Sutton says: “People are annoyed with spam. July 2017 seems a long ways away, but it really isn’t. You need to get your head around this and get the processes in place.”

© 2015 Investment Executive. All rights reserved.