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CRTC sends shot across the bow to international telemarketers

telemarketing-quebecIn a precedent-setting ruling, the Canadian Radio-television and Telecommunications Commission (CRTC) has issued its first penalty to a foreign-based telemarketer for violations of the Unsolicited Telecommunications Rules.

The administrative monetary penalty (AMP) was paid by a Florida company as part of a settlement for making unsolicited telemarketing calls via an automatic dialing-announcing device (ADAD) to offer cruises to Canadians, many of whom have their phone number registered on the National Do Not Call List (DNCL). In addition, the company did not possess a valid exemption to the National DNCL.

The robocall campaign in question offered allegedly free cruises to call recipients in exchange for answering a survey. While the telemarketing rules do not apply to true surveys, if the Commission is of the view that the survey is used as a means of generating leads for the purpose of solicitation, known as “selling under the guise”, the calls will be considered to be telemarketing calls and the rules will apply.

The CRTC has, in the past, entered into compliance agreements with foreign telemarketers; however, the announcement marks the first case in which a foreign telemarketer has agreed to pay an administrative monetary penalty under the Telecommunications Act. The Company has also volunteered to cease making unsolicited telemarketing calls to Canadian consumers.

Enforcement actions against foreign operators are time-consuming and necessarily rely on the cooperation of foreign regulatory agencies. The CRTC indicated that during its investigation, it worked closely with the Federal Trade Commission (FTC). It may be that the settlement with Canadian authorities was aided by the fact that a similar investigation for robocalls was underway in the US against the same companies. In this regard, it was announced earlier this month that the FTC and 10 state attorneys general had also taken action against Caribbean Cruise Line Inc. and seven other companies that assisted in a massive telemarketing campaign that resulted in billions of robocalls.

In the CRTC announcement, the Commission’s Chief Compliance and Enforcement Officer noted that this cross-border investigation sends a message to foreign-based telemarketers that they must comply with Canadian telemarketing rules when calling into Canada.

Indeed, the ruling may serve to take the wind out of the sails of non-compliant foreign telemarketers.

David Elder, Stikeman Elliott LLP

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