Law Times

Page 10 aPril 27, 2015 • Law Times www.lawtimesnews.com FOCUS CRtC taking action against foreign telemarketers Despite successes, enforcement relies on co-operation by companies, regulators By miChael mcKiernan For Law Times he Canadian Radio- television and Tele- c o m m u n i c a t i o n s Commission has sig- nalled a tougher line against foreign telemarketers after issu- ing its first fines to companies based outside of the country for national do-not-call-list viola- tions, says an Ottawa communi- cations lawyer. Last month, the CRTC an- nounced it had collected a $200,000 penalty from Carib- bean Cruise Line Inc., a Flori- da-based company that offered cruises to the Bahamas, as part of a settlement for violations of the unsolicited telecommunica- tions rules. The case marked the first time the regulator has is- sued a penalty to a non-Canadi- an company for calling numbers registered on the list after more than six years of operation. A few weeks later, the com- mission announced it had issued a second penalty to a foreign tele- marketer, this time for $145,000 to Arizona-based Rainmaker Mar- keting/Maple Accounting, with the company accused of making automated calls to Canadians of- fering lower credit card rates. In a statement, Manon Bom- bardier, the CRTC's chief com- pliance and enforcement officer, said the result "of this cross-bor- der investigation shows that we are making headway in our ef- forts to protect Canadians from unwanted telemarketing calls that originate from here at home, and from other countries." David Elder, chairman of the communications group at Stike- man Elliott LLP, says the CRTC has previously entered into com- pliance agreements with foreign companies for similar violations but notes the addition of mon- etary penalties marks a step up. "I think the message is pretty clear that just because you are calling into Canada from out- side the country doesn't make you immune from Canadian law. That makes the enforcement process a little bit more compli- cated, but obviously there is the will on behalf of the regulator to try and seek out foreign callers and bring them to justice," says Elder, counsel to the firm's Otta- wa office. "It's been a little over a year since [Bombardier] arrived, so it may be that a number of the initiatives she has been push- ing are coming to fruition at the same time." According to Elder, the diffi- culty in dealing with companies based in foreign jurisdictions comes from the fact that the CRTC needs co-operation either from the subject of the investiga- tion or a domestic regulator. In its releases announcing both fines, the CRTC thanked the U.S. Federal Trade Commis- sion for its help with the investi- gations. In the case of Caribbean Cruise Line, it co-operated with the CRTC and the U.S. commis- sion had already announced its own charges against the compa- ny ahead of the Canadian settle- ment, something Elder says may have helped the Canadian regu- lator in collecting its penalties. "They can send requests for information to the telemarketer themselves, but if they don't co- operate, then the CRTC is in a bit of a tricky situation," says Elder. "Clearly, they have the juris- diction to issue orders and penal- ties but they don't have powers to summon them as witnesses. They can issue fines in absentia, but if there is no Canadian presence, collecting on them is sort of im- possible. It requires the co-opera- tion of one of their foreign peers to make that happen, and I know the CRTC has been working very hard with its foreign counterparts to try and get some sort of inter- national framework set up." However, he says the level of co-ordination and co-oper- ation differs between regula- tors around the world, which means enforcement by the CRTC against foreign companies will probably look a little uneven. "If you're a U.S.-based telemar- keter, the odds are pretty good that if you violate Canadian law, you're going to be investigated and fined. If you're outside the U.S. and maybe Europe, then I think it's a little less certain," says Elder. The CRTC showed off the spoils of another international in- vestigation when it recently fined nine air-duct cleaning companies a total of $94,000 for violating the rules under the do-not-call list. All nine were Canadian compa- nies using foreign call centres in India, Pakistan, and the United States to conduct their telemar- keting. Although none of the foreign call centres received fines, they all got notices of violation and warning letters. "The investigations were lengthy and labour intensive given that there were numerous companies and they used foreign call centres that sometimes used caller identification spoofing," said Bombardier in a statement announcing the results. "We appreciate the assistance we received from the Karachi lo- cal police and the RCMP in our investigations of the call centres in Pakistan." James Zibarras, the co-man- aging partner of Toronto law firm Brauti Thorning Zibarras LLP, says the air-duct investiga- tion shows the CRTC is catching up with violators. "There are always going to be attempts to work around the rules, but eventually they get shut down," says Zibarras. "The message here is that the CRTC is not going to allow com- panies to circumvent the law by using foreign-based telemarket- ers to do indirectly what they cannot do themselves directly." Elder says the CRTC's in- creasing willingness to extend its reach beyond Canada could have consequences for violators of Canada's anti-spam legislation. "We could definitely see that same kind of enforcement on the spam side," says Elder. "I think because of the co-op- eration that's required from for- eign regulatory authorities and the extraordinary effort that's required to undertake an investi- gation of that sort, it's more likely they will concentrate their efforts on the really hard-core spam- mers committing serious viola- tions rather than some of the more technical violations." LT September 8, 2015 | Four Seasons Hotel Toronto For further information please visit www.innovatio-awards.com Platinum Sponsor Innovatio_LT_Apr27_15.indd 1 2015-04-22 2:41 PM T

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