You are likely getting a flurry of emails asking you to provide the sender CASL (Canada’s anti-spam legislation) consent. You got similar consent requests before July 1, 2014 when CASL first came into effect. Now you are getting more such express consent requests. Why is this? Well there are two reasons, both of which may mean you need to work on your own contact management database before June 30th.
1. End of the Business Relationship Transition Rule:
First it is because on July 1, 2017 the implied business consent transition rule for CASL expires. This grandfathering rule provided the sender an implied consent where the sender had both (i) done business with the recipient at any time prior to July 1, 2014 and (ii) had sent that party at least two electronic messages before that same date. For example, if the sender had last done business with a customer in 2005, and had sent that customer at least two emails, there was implied consent. The transition rule gave senders a three year window to collect express consent from that lapsed customer.
After June 30, 2017 and the end of the transition period, CASL’s implied consent for the “existing business relationship” reverts to a time limit equal to the length of the business relationship, plus two years (unless the recipient unsubscribes sooner).
To deal with customers who will no longer be grandfathered, senders are taking the opportunity before the transition rule expires to collect express consent, which is not time limited, and lasts until the recipient chooses to unsubscribe. Hence the flurry of emailed consent requests.
The end of the transition rule means that when sending commercial electronic messages (such as marketing materials) after July 1, 2017, the sender needs to have purged from its contact list those persons who have not done business with the sender during the prior two years and who have not provided express consent to receive such messages. For example, the sender might check its accounting records and note the former customers to whom it has not sent an invoice for the past two years.
This task to purge recipients who have not given express consent and for whom the implied “existing business relationship” consent time limit has expired, is a contact management list administration nightmare to complete.
2. Exposure to Class Actions:
The failure to observe CASL provisions after July 1, 2017 will expose the sender to enforcement not only by the three CASL regulators, but now the sender is also exposed to the right of private action under CASL. This means civil litigation can be launched by aggrieved parties, including possible class action proceedings.
Typically it is hard to prove the plaintiff’s’ damages arising from breach of statute. However CASL provides for statutory damages in the amount of $200 per offending commercial electronic message, up to $1 million per day, for each day the offending messages were sent.
For example, the CRTC last year settled with three car rental companies who had allegedly sent misleading electronic advertisements about car rental prices. They paid the CRTC $3 million in administrative monetary penalties, plus costs. If that marketing campaign had happened after July 1, 2017, then in a possible class action, the class of the allegedly mislead customers might claim for both (i) the statutory damages of up to $1 million per day plus (ii) the difference in what the car renters paid to rent the vehicles in excess of the advertised prices.
That would be expensive indeed.
To read more about Canada’s anti-spam legislation, previous issues of our CASL Update are available here.