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The Untold Story of Do-Not-Call Enforcement (aka Why Killing Do-Not-Call Can't Come Fast Enough)

By Michael Geist

Earlier today, I posted on how one of the most significant aspects the anti-spam bill introduced on Friday was not reported or discussed in government briefing materials.  Namely, that buried at the very end of the 69-page bill, are provisions that lay the groundwork to kill the National Do-Not-Call list.  I noted that the proposed approach is very complicated, but boils down to the government repealing the provisions that establish and govern the do-not-call list.  In its place, the Electronic Commerce Protection Act approach of requiring an opt-in would apply, meaning that Canadians would no longer need to register their phone numbers on a do-not-call list.

My weekly technology law column (homepage version, Toronto Star version) provides some reasons why that the change cannot come fast enough.  The column reports that while misuse of the do-not-call list remains a concern, a review of thousands of pages of internal government documents released under the Access to Information Act reveal that it is only the tip of the iceberg.  In addition to lax list distribution policies, the enforcement side of the do-not-call list raises serious alarm bells with the majority of complaints being dismissed as invalid without CRTC investigation, the appearance of a conflict of interest in sorting through complaints, and a regulator that has been content to issue to "warnings" rather than levying the tough penalties contained in the law.

The CRTC documents obtained under Access to Information include a list of companies that have downloaded the do-not-call list. Given the broad exceptions under the law, virtually no charities, survey companies, political parties, or newspapers have acquired it.  Instead, real estate agents, car dealers, financial advisors, and lawn care companies dominate the list of over one thousand organizations.  Many of those organizations are identifiable, yet there are also over a hundred provincial numbered companies for which little is known, as well as cryptic names such as 'My broker office' or 'Michele.' It is unclear whether the CRTC invoked further verification before granting access to unknown organizations.

The proliferation of the do-not-call list is certainly disconcerting, but picture that emerges about its enforcement is even more troubling.  The documents reveal that the CRTC receives over 20,000 telemarketing complaints each month, many involving the do-not-call list (some complaints may relate to other telecommunications rules that cover automated dialers or curfews). 

The initial evaluation of complaints is handled by Bell, which manages the do-not-call list, rather than the CRTC. Bell reviews each complaint and provides a prima facie evaluation of whether it is valid, invalid, or indeterminate (which require further investigation). Despite tens of thousands of complaints, very few have been categorized by Bell as a prima facie violation of the do-not-call list.  For example, in January, Bell reported that there were only 42 valid prima facie national do-not-call violations, while 3,033 national do-not-call complaints were ruled invalid (an unknown number of do-not-call complaints were treated as indeterminate). 

The situation was much the same in prior months.  In December 2008, Bell reported only 32 valid do-not-call complaints, while dismissing 2,748 complaints as invalid.  In November 2008, there were 44 valid complaints as opposed to 3,981 complaints dismissed as invalid.

Not only are the vast majority of do-not-call complaints dismissed as invalid without any further investigation, but a complete list of consumer complaints lodged on the CRTC's website reveals that a who's who of the Canadian business community has been the target of complaints. 

Alongside a steady of stream of complaints about vacation offers and duct cleaning, leading retailers such as the Bay and Zellers, financial institutions such as MBNA, telecommunications companies such as Rogers, Telus, and Bell, as well as newspapers and charities regularly appear on the complaints list.  Under the current system, this means that Bell adjudicates whether complaints about its own telemarketing practices (and those of its competitors) are prima facie valid or invalid, a procedure that raises obvious concerns about conflict of interest.

Complaints that survive Bell's initial round of scrutiny go to the CRTC for further investigation.  To date, the CRTC has sent out approximately 70 warning letters where it believes there are reasonable grounds to conclude that the organization is not in compliance with the do-not-call list legislation.  Recipients of the letters are asked to take "corrective action" to address the concerns and warned that failure to do so could lead to penalties of up to $15,000 per violation for corporations.  Notwithstanding that threat, the CRTC has yet to levy any fines.

Given the ongoing concerns around list misuse, enforcement, and overbroad exceptions that may be leading to the dismissal of the majority of complaints without further investigation, Industry Minister Tony Clement's decision to open the door to the do-not-call reform is much needed.  The complicating factor is that the ECPA provisions related to the do-not-call list are exceptionally complicated and could be delayed for years. If the DNCL is to be fixed - as it should be - better to avoid delays and get on with the job.

Full post as published by Michael Geist on April 27, 2009 (boomark / email).