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What is CASL and why do I need to comply with it

 casl lawa wendy hulton(CASL) came into effect back on July 1, 2014 and while Canada was late to the anti-spam movement, it caught up fast with one of the toughest and widest reaching anti-spam regimes to date.  


 

(CASL) came into effect back on July 1, 2014 and while Canada was late to the anti-spam movement, it caught up fast with one of the toughest and widest reaching anti-spam regimes to date.  

But CASL applies to much more than traditional “spam.”   CASL applies to all your electronic messages (think email, text, SMS, etc.) that you are sending in Canada, if any aspect of the message encourages participation in any kind of commercial activity.  You can stop reading this article now, if you already know that CASL (with a few exceptions) essentially prohibits sending commercial electronic messages (aka CEMs) to anyone in Canada without their consent.

 Under CASL, consent can either be “express” or “implied.”  Express consent is preferable because it remains valid until it is revoked.  In order to obtain express consent, you must clearly disclose: (1) what you are seeking consent to send (promotions, sales, etc.), (2) information identifying the sender, and (3) mention that the party may unsubscribe at any time.

Implied consent, for example, is valid for six  months from the date the recipient sent a request for a quote to the sender, unless withdrawn sooner.  Implied consent also applies if there is an “existing business relationship” between the sender and the recipient, based on the purchase of products or services between the parties within the past two year period preceding the date the CEM was sent.

CASL’s provisions allow CEM type messages to be sent without full CASL compliance in a B2B context such as messages sent within an organization, or by an employee, representative, consultant or franchisee to another employee, representative, consultant or franchisee of that organization, in connection with the activities of that organization or to another organization, if the organizations “have a relationship” and the message concerns the activities of the recipient organization.

Messages sent in the context of a “Family Relationship” or “Personal Relationship,” are also exempt.  In this case, “family” means individuals related by marriage, common-law partnership or a legal parent-child relationship and a personal relationship typically means individuals who have had in-person, voluntary, two-way communications where it would be reasonable to conclude that they have a personal relationship.

CASL also contains provisions that permit one commercial electronic message to be sent following a referral by any individual who has an “existing business” or “non-business relationship,” family or personal relationship with the person who sent the message and that discloses the name of individual that made the referral and the fact that the message is sent as a result of the referral.

So, what happens if you don’t comply with CASL?

You run the risk of potential significant penalties and lawsuits.  CASL provides for either actual damages or statutory damages of $200 for each violation, up to a maximum of C$ one million/day for individuals and C$10 million/day for corporate entities.  In determining the final amount of damages to award, courts analyze the personal/corporate history of the violator(s), the financial benefit obtained and the nature and scope of the violation(s).  Considering that marketing campaigns may involve millions of CEMs, potential damages under CASL may escalate very quickly. A person can seek to avoid liability for a violation by showing that it/he/she exercised due diligence to prevent the commission of the violation, among other common law principles. 

Examples CASL enforcement action over the last couple of years:

  • Compu-Finder

The first notice of a CASL violation involved 3510395 Canada Inc. (doing business as Compu-Finder), which was slapped with an administrative monetary penalty of $1,100,000 for repeatedly sending CEMs without recipients’ consent, as well as sending CEMs without a properly functioning unsubscribe mechanism.

  • PlentyofFish
  • In the second CASL case, PlentyofFish Media Inc. (PoF), the operator of the online dating web site Plenty of Fish, voluntarily entered into an undertaking with the Canadian Radio-Television and Telecommunications Commission (CRTC) in order to settle several alleged violations of CASL.  These included sending CEMs to registered users of its own web site that contained an unsubscribe mechanism that was not set out “clearly and prominently” and was not able to be “readily performed.”  PoF’s penalty was only $48,000.
  • Porter Airlines

In the third public CASL case, Porter also entered into a voluntary undertaking with the CRTC after Porter was found to have sent CEMs to email addresses for which it was not able to provide proof of consent, as well as sending CEMs that did not provide complete contact information required by CASL. Other CEMs sent by Porter either contained no unsubscribe mechanism or one that was not set out “clearly and prominently”, and there was at least one instance where the unsubscribe mechanism was not given effect within 10 business days as required by CASL. Porter’s penalty was $150,000 and Porter was obliged to take corrective measures such as updating its mailing list and ensuring that its CEMs met form requirements, as well as implementing a compliance program.

Rogers Media Inc.

Rogers Media paid $200,000 as part of an undertaking to resolve alleged violations of CASL. The CRTC’s investigation alleged that Rogers Media failed to comply with various CASL requirements between July 2014 and July 2015.  During this period, the company allegedly sent commercial emails containing an unsubscribe mechanism that did not function properly or which could not be readily performed by the recipient.  In addition, in some instances, the electronic address used to unsubscribe was allegedly not valid for the required minimum of 60 days following the sent message.  Rogers Media also allegedly failed to honour, within 10 business days, requests from some recipients to unsubscribe from receiving future commercial emails. 

Why should you be more concerned about CASL after Canada Day?

As of July 1 of this year, Canadians will also be able to launch private and class action lawsuits to collect damages for violations of CASL.  Because the CASL requirements are so broad, so strict and so easily violated, most people expect to see a flood of CASL-specific class action lawsuits.  The private right of action allows parties to sue for actual and statutory damages. Statutory damages could prove to be quite significant.  If your organization has cyber / privacy liability policies, you may want to determine whether they cover third-party claims, class actions and penalties arising out of privacy/CASL violations.   You may also want to check any applicable directors’ and officers’ liability policies, as they may exclude marketing or privacy violations.

 

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