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Sales and Marketing

New anti-spam law ‘a big deal’ for small businesses Add to ...

Small businesses are scrambling to make sure they’re compliant with new anti-spam legislation taking effect on July 1 that will impact how they drum up future sales.

Canada’s Anti-Spam Legislation (CASL) is a tough new law meant to crack down on unwanted e-mail and texts, and it will apply to companies and organizations worldwide. Businesses selling or promoting products or services will need to prove they have consent to reach out to new, existing and potential customers using electronic messages, a list that includes tweets.

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While the law impacts any commercial communication sent by businesses of all shapes and sizes – including non-profits and charities (with some exceptions) – it’s the smaller ones with fewer resources that are expected to have the most trouble complying.

“It is a big deal,” says Kathryn Frelick, a lawyer at Miller Thomson LLP in Toronto, who has been busy working with her colleague Jennifer Babe on advising businesses about the impacts of CASL. “A lot of small businesses don’t have the technology or the budget, or they can’t amend their technology in time to be able to have this ready for July 1.”

Canada is the last of the G20 countries to put forward this type of legislation, which is part of international agreements. Experts describe CASL as the broadest legislation of its kind in the world. It has been in the works for a few years, but it is starting to gain increasing attention as the deadline draws near.

CASL, which is also known as Bill C-28, received royal assent in 2010. It was in limbo for a few years amid intense lobbying from a number of businesses and groups, particularly those worried about negative impacts. In late 2013 the government said it would take effect on July 1, 2014, giving businesses six months to prepare. That’s a shorter time frame for implementation than many had expected.

The penalties for each violation can be up to $1-million for an individual and up to $10-million for companies. The law will be enforced by three government agencies: the Canadian Radio-Television and Telecommunications Commission (CRTC), the office of the privacy commissioner, and the Competition Bureau. As of July 1, 2017, there will also be a private right of action, which means people can start taking legal action against anyone not following the rules. The big concern for businesses is the threat of class-action lawsuits.

The court can award damages for loss or harm, and it could award a separate monetary penalty for each violation.

International companies doing business in Canada are also paying attention. The legislation applies to any message sent from or accessed by a computer in Canada, says Ms. Frelick, noting that Canadian regulators share information with their counterparts in other jurisdictions about illegal activity.

“Enforcement of companies outside Canada is another matter, but there are multi-jurisdictional agreements and international cooperation,” she says.

CASL applies to a commercial electronic message (CEM) sent by any medium.

“They don’t look at the sender, they look at the message, and it is technology neutral,” Ms. Babe of Miller Thomson says. “If you use social media to merely post an item, fine. If you use your LinkedIn, Facebook or Twitter account to send an e-mail to another person, which is commercial in nature, then it is a CEM under CASL.”

How can you get consent? It can be implied through an existing business relationship, but that implied consent ends two years after the business deal ended. The business also has to be able to prove the deal and track the timing.

Getting consent can be written or oral. If companies want to do it electronically, through e-mail for example, they need to reach out to clients and customers by July 1 and have them opt-in. That may include having the customer check a box that says they’re willing to receive electronic communications. After July 1, this process will be an offence.

Those who don’t have consent by July 1 will need to get it through other means, such as a telephone call or old-fashioned snail mail.

There are some exemptions under the legislation, including one for registered charities, but only for fundraising activities or associations that are communicating with members.

“People haven’t realized the impact they will have on their business,” says Lloyd Longfield, president of the Guelph Chamber of Commerce, which has recently hosted a few CASL information seminars in its community.

“We are trying to bring them message home that this is something we have to hit hard and hit fast, because most businesses will find themselves out of compliance with their communications,” he says.

Mr. Longfield’s not-for-profit organization is one of those businesses that will impacted, and he is working hard to get on board with the pending new legislation and try to set an example for members. While he agrees spam is a problem, Mr. Longfield and many other businesses say they believe the government is tackling the problem the wrong way through CASL.

“Instead of cutting out spam it’s cutting out communications and it’s going to inhibit commerce and enterprise,” he argues. “It’s going to have a big impact on small businesses that use e-mails as a low-cost way of communicating with potential clients.”

The cost of non-compliance will be another huge issue. It will involve a lot of red tape that will take businesses away from their daily operations, making them less productive and competitive, Mr. Longfield adds. “Other countries don’t have to comply this way, and it’s putting small business at a disadvantage.”

Marketing company Elite Email has published a free online CASL Survival Guide that offers standard advice, as well as a few practical tips to help businesses navigate through the process. The guide even includes advice on how to handle negative emotions that may arise around the changes.

“Take a few minutes to bang your desk, raise your fists in the air, shout out some curse words, and any other action that you should probably do with your office door closed,” the guide states. “You don’t want to be harboring this rage going forward since you want to be focused on what you have to do, not being mad that you have to do it.”

Elite Email president Robert Burko says the big issue for small businesses is that they don’t know about the legislation, and when they find out about it, they’re unsure of how to prepare. Most are at a disadvantage because they don’t have lawyers on retainer, or they can’t afford one.

“Without them knowing, how can they possibly comply with this new law?” he says. “This economy is fuelled by small businesses and we have to give them the information they need. The average small business wants to be compliant, they just don’t know how.”

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