CANADA’S TOUGH ANTI-SPAM LEGISLATION IS HERE, ITS REAL AND YOU NEED TO LEARN HOW TO WORK WITH IT
There’s a big change happening in Canada. If you’re a business, such as an automotive retailer there’s no question it will affect the way you interact with your customers, forever. We’re referring to Canada’s Anti-Spam Legislation (CASL).
Spam has become a huge problem. Our email inboxes and texting services are frequently cluttered with unsolicited messages, ranging from sales pitches for pharmaceuticals, to “business opportunities” with people in faraway countries, often designed to defraud those who respond to them.
The situation has become so dire that Canada’s federal government has taken steps to implement what is to date the toughest and arguably the most comprehensive anti-spam legislation in the world. And for those that fail to comply the penalties are severe — up to $1 million in fines for individuals and $10 million for businesses. CASL falls under the responsibility of the Canadian Radio-television and Telecommunications Commission (CRTC) which will have a wide variety of legal powers to challenge and tackle those it feels are operating in violation of the new anti-spam law. So it’s serious business.
We’ve touched on the topic of CASL in the April 2014 issue of Canadian auto dealer (with Alan Bird’s Leading Strategies column — plus a further update from Alan in this issue on pages 38-39) but due to the importance of this new legislation and the timing of its implementation (July 1, 2014) we felt it was crucial to look further into the topic.
For this special feature we reached out to a variety of resources, including federal and provincial dealer associations, retail auto industry partners, subject matter experts, legal firms and also dealers to get their views on CASL. We wanted to try and show our readership what the real impact is likely to be for auto retailers and their affiliates and how they can best prepare themselves to operate successfully in this brave, new era of digital marketing.
Three-stage process
CASL will be implemented in three stages. It begins with the actual law taking effect as of July 1 this year but it will be followed by two further implementation stages. On January 15, 2015 legislation affecting the installation of computer programs will take effect and finally, there’s also a July 1, 2017 implementation date regarding Private Right of Action (in other words penalties resulting from violations under CASL can be fully enforced).
Although CASL was officially passed by parliament in 2010, the final draft wasn’t prepared until December 2013, meaning that many businesses, including dealers, haven’t had a great deal of time to understand the implications of the new law. Nevertheless, across the country, dealer associations, industry partners and legal teams have been hard at work informing auto retailers — doing their best to help them understand the implications of CASL and how to best be prepared for it.
A new reality
Rick Gauthier, President and CEO of the Canadian Automobile Dealers Association says it is important to understand that CASL is the new reality. “There’s no getting around it,” he says. “The legislation is very specific as to what dealers (and other businesses) can and cannot do.” Yet with such a stringent, yet broad approach to combating spam, it can be easy to fall foul of compliance, one reason why CADA chose to prepare a detailed memo on the subject with a specific emphasis on the implications from an automotive dealer perspective.
CADA’s Legal Affairs Department, led by Director of Industry Relations and General Counsel Tim Ryan, spearheaded the project with the aim of not only tackling the complexity of CASL but also presenting it in a format that was both comprehensive and yet easy enough for dealers to understand so they could take the information and use it as a guide — one which they could then apply to their own operations.
Gauthier stresses that the run up to July 1 has been very important for dealers and notes that this window has provided some opportunities to make the transition to operating under CASL that much easier. “There have been immediate steps,” says Gauthier. “If these steps haven’t been taken, then moving forward, it will be more complicated for dealers to reach out to their customers.”
Gauthier refers to the need to obtain “Express Consent” from customers regarding Commercial Electronic Messages (CEMs) and prior to the July 1 deadline, the law has enabled them to still do that via electronic means. After July 1st the process to do so requires verbal or written processes to obtain consent — that’s where the complicated aspect comes into play.
The gold standard
“Expressed Consent” are two important words to note, for the notion of “consent” itself in relation to CEMs is at the heart of this new legislation. CASL essentially carves up consent into two categories, “Express” and “Implied.” Both have particular definitions under the new legislation but both also contain a number exemptions.
“Express Consent” is viewed as the gold standard.
During a special seminar, put together by leading digital marketing provider SCI MarketView, multinational law firm Norton Rose Fulbright and Canadian auto dealer on May 28, 2014 in Toronto, J.M. Madeleine Donahue, Senior Partner at Norton Rose Fulbright’s Canadian practice, said the reason why “Express Consent” is the gold standard is that once a business is able to obtain that consent from the customer it doesn’t expire, unless that customer or individual asks to withdraw or “opt out” from the process.
This contrasts with “Implied Consent” which under CASL means that consent to receive CEMs can only be “implied” in those situations expressly described within the law.
As CADA’s legal team noted in the memo it prepared for dealers, the “Implied Consent” aspect is most likely to refer to situations where a dealership has an “ongoing business relationship with a particular customer or recipient.” Under that definition, if there has been a transaction between the business and the recipient, i.e, such as an individual customer purchasing or leasing a vehicle from a dealership, within a two-year period of that message originally being sent, or if the recipient of that message made an inquiry or application within a six-month period immediately before the day on which the message was sent — that constitutes as being within the guidelines of “Implied Consent,” under CASL.
If dealerships are able to obtain “Express Consent” from their customers regarding CEMs they don’t have to worry about trying to adhere to the complexities of “Implied Consent” such as tracking timeframes within the two-year and six-month windows and whether or not “an existing business relationship” is considered valid under the new law. Therefore dealers and other business are encouraged to obtain Express Consent, though after July 1st, CADA suggests the most effective strategy is in writing, such as providing an opt-in box or consent form as part of an official document, such as a vehicle purchase agreement being signed by the customer at the dealership.
Exemptions
Where it gets more complicated, is regarding the exemptions and also dealings with third-party referrals. Although the nature of this article doesn’t allow us to take a really deep dive into CASL’s complexities, what’s important to understand is that there is a limited exemption that allows third-party messages to be sent to recipients. In other words, the consent requirements under CASL do not apply to the first CEM that is sent to a recipient, provided the sender has been referred to the recipient by somebody who has a non-business relationship with the person who is the CEM’s intended target. It is important to note however, that this exemption applies specifically to the first message that is sent out and not to subsequent messages.
CASL also requires that every CEM sent must include the name of the particular sender, their contact information and also an unsubscribe mechanism that allows the recipient to opt out at any time. Because CASL also applies to text messaging as well as emails, the practical limitations of including this information with every message means that the CRTC permits the information to be posted on a webpage provided it is “readily accessible and at no cost to the recipient.”
Coaching and support
Although it is difficult to gauge at this point how effective CASL will be in reducing the menace of spam, nor if other jurisdictions around the world will follow Canada’s example, the fact remains that businesses that operate in Canada or conduct correspondence that involves a Canada-based computer system (that’s right CEMs you send to the U.S. or other countries still fall under CASL), will have to adhere to the new legislation.
CADA and other industry experts, recommend that dealers become as educated as they can about the subject, learn where the rules apply, where they don’t and do their utmost to stay within the confines of the law. One approach is by participating in CASL learning sessions, either in person or via webinars. As mentioned previously Canadian auto dealer has partnered with SCI MarketView and Norton Rose Fulbright for some of these (so far workshops have been scheduled in Toronto, Montreal and Calgary during May and June this year).
Dealer associations, both at the federal and provincial level have also been taking an active role — during the Trillium Automobile Dealers Association (TADA) webinar on May 13 — over 400 attendees registered, which TADA Executive Director Todd Bourgon says represents around 65 per cent of the association’s entire membership base. “It was by far the highest number of attendees we’ve ever had for an information session like this,” says Bourgon.
He notes that the idea behind the webinar was to help clarify some of the issues surrounding this complex legislation and while TADA did provide legal expertise regarding the subject, Bourgon stresses, like CADA’s Rick Gauthier that it’s important for dealers to reach out to their own legal teams for a detailed analysis since every dealership’s situation is unique.
Bourgon says he’s received a number of comments citing CASL as the end of social media and digital marketing as we know it. “It’s not the end,” he says but rather the fact that “dealers need to understand that it’s really about giving people an option in how much information they want to receive electronically.”
Silver lining
Although it might seem as draconian legislation, adding another bureaucratic pothole on the road to doing business, Bourgon says that the very nature of CASL also provides the opportunity (and motivation), for dealers to really take their digital marketing to the next level, since the idea of mass electronic emails containing generic messages are not only no longer effective, they’re now also illegal.
“People are using social media and electronic communication to such an extent there is a need for a specific person or department within the dealership to own this,” says Bourgon. He says that by embracing best practices, encouraging transparency and emphasizing proper, personalized customer service, such as using dedicated BDCs, dealers can take steps not only to ensure they stay within the confines of the law when corresponding with customers electronically but also place themselves within a much better position to strengthen their relationships with those customers and bolster their retention rates. And, at the end of the day isn’t that really what the auto retail business is all about?
A vendor’s view
“It is our mandate to bring the latest information to dealers to make sure they are up on web solutions and best practices. We want to make sure dealers understand CASL because it is extremely technical. We think there are a lot of grey areas that are open to interpretation so we want to bring this down to the simplest level in terms of how it is going to impact operations at the dealership level.”
— Jeremy Wyant, Manager, Dealer Performance, SCI MarketView
A Dealer’s view
“Dealers need to be aware of what’s required of them when it comes to CASL. They need to take a look at their processes and the way they interact with their customers to ensure they are compliant. I don’t really see an impact when it comes to getting your message in front of the right person. If the recipient doesn’t like your product or service there is very little you can do to actually get them to respond to you.”
— Sean Gibson, Ottawa Chrysler Dodge Jeep
A lawyer’s view
“The auto industry is a huge business in Canada, so as we go through with CASL it is important to not criticize the government but provide feedback. We need to express concerns regarding the practical application of this legislation in the real world. We need to recommend changes, either amendments to the legislation or processes to better understand it. We need to be proactive.”
— J.M. Madeleine Donahue, Senior Partner, Norton Rose Fulbright Canada
A Dealer’s view
“CASL is all-encompassing. I think the biggest concern is that the fines are not representative of somebody who is trying to do the right thing. Obviously we’re trying to get people to express consent and to allow them to understand that up to a point we need to communicate with them for certain things, such as maintenancescheduling or manufacturer recalls. The bulk of our clients also want to know if and when we have any offers. For example, we routinely send out promotions for those who are 24 months into a 36-month lease, so it’s important we’re all on the same page.”
— Terry Budd, Budd’s Group
