Canada’s new Anti-spam & Online Fraud Act
April 1, 2012 by Chris Eagles and Bradley Freedman
Canada’s new anti-spam and online fraud act (CASL) creates a comprehensive regime, of offences, enforcement mechanisms, and potentially severe penalties designed to prohibit unsolicited or misleading commercial electronic messages (CEMs) and deter other forms of online fraud. So, what are the rules for CEMs?
The Basic Prohibition
CASL prohibits the sending of a CEM unless: (1) the recipient has consented to receive the CEM; and (2) the CEM complies with prescribed formalities. The prohibition is not limited to mass unsolicited commercial email (spam), but also applies to a CEM that is sent directly to a single recipient.
CASL applies to messages sent by any means of telecommunication (including text, sound, voice, or image) to an address for an email, instant message, telephone, or any similar account. There are limited exceptions.
An electronic message is considered to be “commercial” if one of its purposes is to encourage participation in a “commercial activity,” which is broadly defined as a transaction, act or conduct of a commercial character. The prohibition also applies to an electronic message that requests a person’s consent to receive a CEM. There are limited exceptions, including CEMs between friends or family and communications regarding the recipient’s commercial activity.
CASL establishes an opt-in regime that requires a recipient give express or implied consent to receive a prohibited CEM. A person who alleges consent to receive a CEM has the onus of proving it.
A request for express consent must clearly and simply specify the purpose of the consent and other prescribed information, including the identity of the person seeking consent and the persons on whose behalf consent is sought.
Implied consent arises in limited circumstances where the sender and recipient of the CEM have an existing business or non-business relationship within the previous two years.
There are also certain kinds of CEMs for which consent is not required, including messages that confirm a commercial transaction previously agreed to by the recipient and messages that provide warranty/recall/safety/security information for a product or service purchased by the recipient.
In addition to consent, and even if consent is not required or is implied, a CEM must comply with certain formalities. It must contain prescribed information about the identity of the actual and beneficial sender of the CEM and their contact
information. A CEM must also provide a no-cost unsubscribe mechanism and an electronic address or link to a website that can be used by the recipient to unsubscribe to future messages. The contact information, unsubscribe mechanism and website link must remain valid for 60 days, and an unsubscribe request must be implemented within 10 business days.
CASL amends the Competition Act to prohibit knowingly or recklessly sending a false or misleading representation in an electronic message that promotes a business interest. CASL also prohibits false or misleading representations in sender information, subject matter information or locator information, or materially false or misleading representations in the body of an electronic message.
CASL applies if a computer system in Canada is used to send or access a prohibited CEM, regardless of the location of the sender or recipient. CASL imposes liability not only on persons that send prohibited CEMs, but also on persons that cause or permit prohibited CEMs to be sent, or who aid, induce, or procure the sending of prohibited CEMs. CASL provides that employers are vicariously liable for violations by their employees and agents within the scope of their employment or authority.
The CRTC and the Competition Bureau have authority for enforcing different parts of CASL regarding CEMs.
Contravention of provisions regarding unsolicited CEMs are punishable by substantial administrative monetary penalties—$1 million per violation maximum for individuals, and $10 million per violation maximum for organizations. False or misleading representations in an electronic message are punishable by fines and imprisonment. In a private action, the court may award compensatory damages and a private fine, to maximum of $1 million for each day on which a contravention occurred.
This column is provided for general information only and may not be relied upon as legal advice. Send comments