1. -- Telemarketing -- The New Regulatory Environment Wally Hill Vice-President Communications & Public Affairs Canadian Marketing Association Canadian Circulation Managers Association June 9, 2008

2. Telemarketing is big business

Source: CMAs Marketings Contribution to the Canadian Economy, Fall 2007

In 2006:

• $4.1 billion was spent on telemarketing

• generated $26.1 billion in sales

• created 155,000 jobs

60% are B2B calls; 40% B2C calls

Overall ROI of $6.24 per $1

3. But a controversial channel

Most intrusive form of marketing

Right to be left alone aspect of privacy

2003/04 Environics survey:

• 80% support a National Do Not Call List (NDNCL)

• 66% would likely sign up

Ineffective enforcement regime

Runaway leader in terms of consumer complaints to CMA

4. The regulatory framework for telemarketing in Canada

Telecommunications Act

• CRTC rules and new services

Competition Act (Section 52)

B.C. telemarketing licensing regime

CMAs mandatory Code of Ethics

5. Responsible Self-Regulation

CMA Code of Ethics

• Living document

• Constant review to ensure Codereflects current marketing best practices

• Significant amendments:

• 1993: Privacy Code & mandatory DNC

• 1996: Positive consent (sensitive info)

• 1997: Internet Marketing

• 1999: Marketing to Children

• 2002: Marketing to Teenagers

• 2002: Opt-out Consent

• 2004: New E-Marketing Rules

• 2007: Updated Code of Ethics

6. How we got where we are today

Telemarketing regulation gets underway in 80s

Growing pressure from consumers in 90s

CRTC consultations in 2001

Launch of DNCs in other countries

CRTC Decision 2004-35

Bill C-37 passed in November 2005

Consultations in 2006/07 on regulations and operational details leading to Decisions 2007-48 & 2007-49

National DNC List goes live by Sept. 30/08

• New telemarketing rules also come into effect at that time

7.

Telemarketers and clients of telemarketers must

• Subscribe to the National DNCL prior to making any telemarketing telecommunications

• Pay subscription fees and keep a record proof of payment and subscription for3( three ) years

May not use national DNCL for any purpose other than compliance with the rules

Do not call registered consumers unless you have prior express consent

National DNCL Rules 8. National DNCL Application

What types of telecommunications can be registered on the National DNCL?

• Canadian land line, wireless, fax, VoIP numbers

• Conform to North American Numbering Plan

9.

May not sell, rent, lease, publish or otherwise disclose National DNCL to any person outside of the telemarketers or client of telemarketers organization, including affiliates*

May provide National DNCL to person supplying services to enable compliance with the rules

31-day grace period

A consumers registration is in effect for 3 years

* One entity is affiliated with another entity if one of them is controlledby the other or if both are controlled by the same person

National DNCL Rules 10. Exemptions to National DNC List

Typesof telemarketing telecommunications areexempt,notorganizations

• Made by or on behalf of charities registered underIncome Tax Act

• Made for purposes ofelection campaigns or survey research

• Made to solicit a subscription to newspaper of general circulation

• • Note: Exemption specific to newspapers does not include magazines

• Calls where there is an existing business relationship consumer

• Business-to-business calls

11. Exemptions to National DNCL

Organizations making exempt telecommunications must adhere to all the other telemarketing regulations

• Maintain an internal do not call list

• Identify the purpose of their call at the beginning of the call

Organizationssolelymaking exempt telecommunications are not required to subscribe to the National DNCL,but they must register with the operator

12.

Definition of existing business relationship

Consumer has

• Purchased services or purchased, leased or rented products within the 18-month period preceding date of the telemarketing call

• Made an inquiry or application about a product or service within6-month period preceding date of telemarketing call

• A written contract that is in existence or has expired within18-month period preceding date of telemarketing call

Exemptions to National DNCL 13.

Rule states

• express consent has been provided by such consumer to be contacted via a telemarketing telecommunication

Part V of the rules describes acceptable forms

• Written, including a completed application form

• Oral

• Electronic via toll-free number or Internet

• Other methods if record created by consumer or third party

Onus on telemarketer and client of telemarketer to prove

Express Consent 14. New unsolicited telemarketing rules

Will apply toalltelemarketers even if they are exempt from the National DNCL Rules

15. New unsolicited telemarketing rules

Telephone Calls:

• Calling hours addressed for first time

• • Restricted to 9 am-9:30 pm Monday-Friday

• • 10 am-6 pm Saturday-Sunday

• At beginningof a call a telemarketer must identify:

• • Name or fictitious name of the individual placing call

• • Name of telemarketer whether calling on its own behalf or on behalf of a client of telemarketer

• • Provide the purpose of call (if call is exempt from the National DNCL Rules)

16. New unsolicited telemarketing rules

Upon request, telemarketer must provide:

• local or toll-free numberallowing customer access to speak to an employee or other representative of the telemarketer and where applicable, its client

• name and address of an employee or other representative of the telemarketer and where applicable, its client, to whom the consumer can write

17. New unsolicited telemarketing rules

For any telephone numbers provided to a consumer, the call:

• Shall be answered either by a live operator or voicemail system to take messages for the consumer

• • Voicemail must inform consumers that their call will be returned within 3 business days

• • Telemarketer or client of telemarketer must return consumer's call within 3 business days

18. New unsolicited telemarketing rules 19. New unsolicited telemarketing rules

Telemarketers must display originating calling number or alternate number where call originator can be reached (except where number display is unavailable for technical reasons)

Sequential dialling prohibited

Random dialling and calls to non-published numbers are permitted, except to numbersregisteredon National DNCL; are emergency lines; and are associated with healthcare facilities

20. New unsolicited telemarketing rules

DNCLs are to be maintained by the telemarketer on its own behalf or on behalf of a client of a telemarketer and remain active for 3 years effective within31 days from the date of the consumer's do not call request

• Consumer shall not be asked to call elsewhere to make their request

21. New unsolicited telemarketing rules

A telemarketer using a predictive dialling device to initiate a call shall not exceed, in any calendar month, a 5% abandonment rate

Telemarketer and/or its client shall maintain records of actual abandonment rates for a period of 3 years from the date each monthly record is created

22. New unsolicited telemarketing rules

Fax marketing calls

• Restricted calling hours

• Fax must include following information at top of first page in 12 pt. font size or larger

• • Name of telemarketer; originating date and time of fax

• • Local or toll-free numbervoice and fax number allowing the customer access to an employee or other representative of the telemarketer, and where applicable, the client of the telemarketer, for the purpose of asking questions or making a DNC request

• • Name and address of an employee or other representative of the telemarketer, or client where applicable, to whom the consumer can write

23. New unsolicited telemarketing rules

Fax telemarketing calls

• Sequential dialling prohibited

• DNCLs are to be maintained by the telemarketer as per voice-based calls

24. New unsolicited telemarketing rules

Automatic Dialling and Announcing Devices used for the purpose of solicitation are prohibited

Penalties for violations

• Up to $1,500 for individuals and up to $15,000 for corporations per violation

25. Enforcement

Due diligence is a valid defence

Who can be held liable for violations?

• Telemarketers who telemarket on behalf of themselves

• Telemarketers who telemarket on behalf of clients

• Clients of telemarketers provided there is an agent/mandatary relationship

26.

• Establish internal working group where best resides?

• Revise consumer agreements and or applications

• Revise contracts with suppliers

• Revise scripts for telemarketers for identification requirements and internal DNC handling

• Implement toll free or local number

• Modify telemarketing fax rules i.e.12 point font, etc.

• Prepare for list download and new record keeping

• Need for employee training and communication plan

What you need to do the basics 27.

For more information:

http://www.crtc.gc.ca

Telecom Decision 2007-48

http://www.crtc.gc.ca/archive/ENG/Decisions/2007/dt2007-48.htm

Telecom Decision 2008-6

http://www.crtc.gc.ca/archive/ENG/Decisions/2008/dt2008-6.htm

Nancy Webster Cole

Senior Manager, Telemarketing Regulations

[email_address]

819-934-6377

28. Responsible Self-Regulation

CMA Code of Ethics & Standards of Practice

• One of the strongest protections for marketing in Canada

• Goes beyond the law

29. CMA rules for telemarketing

Caller Identification

Restricted calling hours

Abandonment rates

Call recording

Internal DNCs

Mandatory member use ofCMA Do Not Contact Program

30. CMAs Do Not Contact Program

However, NDCL will impact CMA Do Not Contact Program

• Current registrants signed up for 3 years

• No new registrations after NDNCL launch

• Numbers not being transferred to NDNCL

• Run off the program over the 3 years

• CMAs Do Not Mail will continue

31. -- Telemarketing -- The New Regulatory Environment Wally Hill Vice-President Communications & Public Affairs Canadian Marketing Association Canadian Circulation Managers Association June 9, 2008