IT’S CASL’S ONE YEAR ANNIVERSARY, AND CANADIAN BUSINESSES ARE ALREADY BEING HIT WITH HEFTY FINES. IS YOUR DEALERSHIP CASL COMPLIANT?
It’s been almost a year since the federal government introduced onerous regulations to reduce unwanted spam.
Usually referred to as CASL (Canadian Anti-Spam Legislation,) the new rules were unleashed upon an ill-prepared Canadian business world in July 2014. Aimed at reducing spam, CASL presents all kinds of businesses with demanding new electronic communications regimens.
Auto dealers do not appear to be a prime target, but they’ll need to continue to closely examine (and modify if necessary) the way they handle emails, text messages and even social media contact with customers and prospects.
The nature of the retail auto business with its dependence on contacts, email marketing and generally “keeping in touch” do make it vulnerable, so a full awareness of all aspects of CASL is critical. Canada’s legislation in this sphere is believed to be the most stringent in the world.
CASL has been widely criticized and widely praised but it’s here to stay. Businesses have no alternative but to plan intensively to protect themselves against the surprisingly hefty fines the government is empowered to levy. Fines can run as high as $1-million for individuals and $10-million for businesses.
It’s also worth noting that directors, officers and other agents of the company can be liable if they participated in the violation.
According to the Canadian Radio-television and Telecommunications Commission (CRTC), the primary government agency enforcing the legislation, CASL is aimed at “reducing the harmful effects of spam and related threats to electronic commerce and working towards a safer and more secure online marketplace.”
The CRTC adds that CASL helps protect Canadians while ensuring that businesses can continue to compete in the global marketplace.
There has already been a case involving a substantial fine. Quebec-based corporate training company, Compu-Finder, was fined $1.1-million by the CRTC for what was described as “flagrantly flouting Canada’s anti-spam legislation.”
According to the CRTC, the company was sending commercial emails to consumers without their consent and did not allow these recipients to opt out of the mailings. The case was based on four violations during July and September in 2014. The company was given warnings by the CRTC and time to comply, but evidently disregarded this demand, according to the CRTC.
In another recent case, an online dating service was fined $48,000 for violating CASL. According to the CRTC, the company sent commercial emails to users of the service with an unsubscribe mechanism, “that was not clearly and prominently set out and which could not be readily performed, as required by the legislation.” The dating site quickly updated its unsubscribe procedure, but the fine was levied nonetheless.
The lesson here is that it’s not enough to simply ensure that customers have an opportunity to unsubscribe to marketing emails by working through a message buried among the small print at the bottom of the page. The opt-out mechanism must be prominent and easy to use.
Make your opt out procedure complex and onerous, and you’ll certainly be in conflict with the principles of CASL. Many CASL-compliant marketing emails only require the user to click twice on “unsubscribe” icons to be removed from the relevant lists.
The process, whether a consumer has opted in or opted out, should be closely tracked and records kept to guard against possible CASL involvement at some later stage.
Senior CRTC enforcement people point out that 245,000 complaints have been received since the first phase of CASL began, and consumers have collectively submitted around 1,000 complaints per day.
While many complaints probably fall into the “mischievous and frivolous” category, auto dealers should be alert to the potential hazards CASL presents, and plan accordingly.
CASL has already forced businesses to rethink how they contact customers by email and by various forms of social media.
In another move by the CRTC, beginning in 2015, customers have had to provide their consent before any software program with the ability to send electronic messages is installed.
The worry here is that consumers are being “snowed under” with software, and often they know little about its function and whether or not it can access personal information.
For the first three years of CASL, consumers cannot take businesses to court individually and can only make complaints via the CRTC. Once consumers get the right of private action in July 2017, car dealers may well find themselves targeted. The time to prepare for that is now.
Disgruntled consumers may well regard this stage as a good time to make complaints against car dealers, whether legitimate or not.
Auto dealerships communicate with customers extensively by email and it’s critical that this is pursued with full knowledge of CASL.
Dealers should familiarize themselves with “implied” and “express” consent — two key factors associated with marketing emails and even routine contact procedures, like service reminders.
In all marketing cases, customers’ permission must be confirmed right from the start and carefully recorded as a hedge against CRTC complaints under the new legislation.
Another potential minefield is that it’s common in the industry for sales management people to switch dealerships from time to time, and it should be fully understood that a list of email customers and prospects gathered at one store cannot be used at another without everyone on the list granting their consent.
In fact, no third party mailing list will be CASL compliant until every individual on the list has granted permission.
It’s important to ensure that everyone involved in electronic communications at the dealership, plus contractors who handle IT work, have at least a passing knowledge of CASL demands.
Attention must also be given to outside suppliers and vendors who provide management tools. Many such services are U.S.- based, and may not have a full understanding of CASL.
Fully understanding every aspect of CASL is a daunting task for even the brightest manager, so any doubts or concerns about likely pitfalls should be discussed with a lawyer familiar with this legislation.
Such advice will be well worth investing in and is certainly a better approach than risking one of those hefty CASL fines.
