Helping Toronto ON franchisors and franchisees understand new anti-spam legislation

Beginning July 1, 2014, Canadian businesses began to feel the impact of CASL, Canada's new anti-spam legislation. It is important for franchisors and franchisees to understand necessary steps to avoid liabilities related to non-compliant practices.

What it is

CASL is formally titled, "An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23." CASL and associated regulations (SOR/2012-23 and SOR/2013-221) received Royal Assent on December 15, 2010.

What it does

CASL is primarily designed to:
  • Prohibit businesses from sending CEMs or commercial electronic messages without consent from the recipient.
  • Altering transmission data in a CEM to result in delivery to an alternative destination, without express consent.
  • Disallow installation of computer programs without express consent.
  • Restrict online promotional misrepresentation of goods or services.
  • Prevent address harvesting through the unlawful collection of personal information.

When it goes into effect

CASL's implementation takes place in three stages:
  • July 1, 2014 – Anti-spam provisions.
  • July 1, 2015 – Prohibitions related to unauthorized installation of computer programs.
  • July 1, 2017 – Private right of action for those affected by breach of CASL to sue for statutory and compensatory damages. Contraventions, whether or not intentional, carry monetary penalties of up to $1,000,000 for individuals and $10,000,000 for corporations.

Key provisions

Bear in mind that this represents only a brief summary of CASL provisions. For the protection of your business, legal consultation and review of current electronic communication and internet practices is vital.
  • Anti-spam – CEMs include text, voice, sound, and image messages with the intent of encouraging commercial activity. Under CASL, CEMs may not be sent to an electronic address unless the addressee has given express or implied consent, the message clearly indicates the name of the sender and contact information (valid for at least 60 day after sending), and includes an unsubscribe mechanism. For messages sent on behalf of another party, the unsubscribe function remains essential, as well as a link or electronic address the recipient may use to refuse future communications. Unsubscribe requests must be honoured within ten days of receipt.

    Some categories (such as family relationships, response to inquiry or complaint, legal obligation, and others) are exempt. An important exemption for franchisors and franchisees is one related to communications sent by employees, consultants, representatives, or franchisees of one organization to another individual within the same organization or another with whom there is a relationship. This has far reaching relevance for international franchise operations.
  • Consent – This provision is central to CASL, but there are exemptions. Consent is not required for a CEM that provides a requested quote or estimate; confirms or completes a consensual commercial transaction; provides recall, safety, or warranty information about a purchased product; provides factual information about a commercial or employment relationship; or makes delivery of a product, service, or update to which the recipient is entitled.

    Of special interest to franchisors and franchisees is a consent exception for third party referrals. For example, if an individual with whom you and the recipient have an existing business or other relationship makes the referral, consent is not required. However, the referring party must be disclosed in the CEM.
  • Express consent – CASL allows you to seek express consent of others to receive CEMs. Your request may be oral or written, must clearly state your purpose and contact information, and indicate that consent may later be withdrawn. This provision makes CASL an opt-in (rather than an opt-out) programme. The recipient's consent must be active and explicit.

    Similar but more stringent requirements apply to express consent for installation of computer programs. A few exemptions (for updates, upgrades, and programs that solely collect, use, or communicate transmission data) and limited implied consent circumstances apply. Especial care is required in utilising the implied consent provision for franchisor and franchisee situations.
  • Transition – CASL sets forth that consent to receive CEMs is implied during a transition period of three years, commencing on July 1, 2014, unless consent is specifically withdrawn. A similar transition period applies to installation of computer programs.
It is crucial for all Canadian domiciled businesses including franchisors and franchisees to develop CASL compliant communication strategies. This includes collection of record formats, record keeping, record protection, inventories of computer program installs, development of templates, and much more. The Franchising Forum is here to help. Call to schedule a consultation.

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