Compliance and Enforcement Decision CRTC 2015-117

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Ottawa, 31 March 2015

File numbers: 8662-G4-201406041, 8665-T170-201406835, 8665-C208-201407503, 8665-T173-201407768, and 8665-R53-201408303

Application to review and vary Compliance and Enforcement Regulatory Policy 2014-155, and applications to modify the Unsolicited Telecommunications Rules regarding the use of automatic dialing-announcing devices for debt recovery calls

The Commission denies applications to review and vary the Commission’s determination in Compliance and Enforcement Regulatory Policy 2014-155 related to the application of the Unsolicited Telecommunications Rules to automatic dialing-announcing devices (ADADs) used for the purpose of debt collection. There is no applicable provincial legislation that requires that debt-collection professionals use ADADs in the course of their communications. Debt collectors are free to use live calls to carry on their activities.

The Commission also determines that four of the applications effectively constitute additional requests to review and vary Compliance and Enforcement Regulatory Policy 2014-155 and, as such, they were filed beyond the applicable deadline.

Background

1. The Commission regulates unsolicited telecommunications pursuant to sections 41 to 41.7 and 72.01 to 72.15 of the Telecommunications Act (the Act). The comprehensive framework for the regulation of unsolicited telecommunications was initially consolidated in Telecom Decision 2007-48. This framework is referred to as the Unsolicited Telecommunications Rules (the UTRs). The UTRs include the National Do Not Call List (DNCL) Rules, which came into force on 30 September 2008, as well as the updated Telemarketing Rules and Automatic Dialing-Announcing Device (ADAD) Rules. The Telemarketing Rules and the ADAD Rules are a continuation of the Commission’s previous rules for unsolicited telecommunications set out in Telecom Decision 94-10 and subsequently reviewed in Telecom Decision 2004-35.
2. In Compliance and Enforcement Notice of Consultation 2013-140 (the Notice), the Commission initiated a comprehensive review of the UTRs. Comments were invited on a range of issues, with a particular focus on whether to relax the ADAD Rules as requested in an application from the Canadian Marketing Association.
3. In Compliance and Enforcement Regulatory Policy 2014-155 (the Policy), the Commission modified the UTRs. Specifically, in response to submissions from various parties, the Commission modified the disclosure requirements set out in Part IV, paragraph 4(d) of the UTRs (the ADAD Rules) to require that ADAD calls made for non-solicitation purposes begin with specific identification information and a brief description of the purpose of the call.^{Footnote 1}
4. The modified UTRs set out in the Policy came into effect on 31 March 2014, with the exception of a change to the grace period for internal do-not-call list requests, which came into effect on 30 June 2014.

The Government of Quebec’s application

5. The Commission received an application, dated 30 June 2014, from the Government of Quebec, represented by the ministère de la Culture et des Communications and the Office de la protection du consommateur. The Government of Quebec requested that the Commission review and vary the Policy with respect to the application of paragraph 4(d) of the ADAD Rules to ADAD calls made for the purpose of debt collection.
6. Specifically, the Government of Quebec submitted that the Commission erred in its determinations set out in the Policy by
   • failing to consider the basic principle of privacy, contrary to the Canadian telecommunications policy objective set out in paragraph 7(i) of the Act and to the Commission’s intentions set out in the Notice;
   • requiring that ADAD calls that are made for debt-collection purposes include a brief description of the purpose of the call at the start of the call (the brief purpose requirement), which, under existing Quebec provincial debt-collection laws, would constitute the prohibited disclosure of personal information if received by anyone other than the intended recipient; and
   • failing to consider the conflict between the pre-existing identification requirements of the ADAD Rules and existing Quebec provincial legislation.
7. The Government of Quebec requested that the Commission modify paragraph 4(d) of the ADAD Rules to enable provincial rules to govern any applicable disclosure obligations when a caller uses an ADAD to conduct activities that are governed by existing provincial legislation.
8. The Commission received interventions regarding the Government of Quebec’s application from the Coalition of Collection Agencies (CCA), Corbett Communications (CorComm), EKOS Research Associates Inc. (EKOS), Forum Research Inc. (Forum), the Market Research and Intelligence Association (MRIA), the Ontario Society of Collection Agencies (OSCA), as well as the Consumers’ Association of Canada and the Public Interest Advocacy Centre (CAC/PIAC). The public record of the proceeding associated with the Government of Quebec’s application, which closed on 1 August 2014, is available on the Commission’s website at www.crtc.gc.ca or by using the file numbers provided above.

Additional applications

9. The Commission also received applications containing requests to modify the UTRs, in particular, paragraph 4(d) of the ADAD Rules (the additional applications), from the following organizations on the following dates:
   • Total Credit Recovery Limited (TCR), 15 July 2014 (file number 8665-T170-201406835);
   • the Coalition of Collection Agencies, 1 August 2014 (file number 8665-C208-201407503);
   • the Ontario Society of Collection Agencies, 5 August 2014 (file number 8665-T173-201407768); and
   • the Receivables Management Association of Canada Inc. (RMA), 18 August 2014 (file number 8665-R53-201408303).
10. As part of its application, the CCA further requested that the Commission suspend or stay any further action with respect to ongoing investigations by Commission staff into allegations of possible non-compliance with paragraph 4(d) of the ADAD Rules pending a determination on its application.

11. In response to procedural requests made by CAC/PIAC and Forum, Commission staff notified the above-mentioned parties, by letters dated 29 August and 18 September 2014, that the proceedings and related deadlines regarding these applications were suspended pending the Commission’s determinations on appropriate process. The additional applications are discussed in greater detail below.

Positions of parties

12. The Government of Quebec noted that, in Quebec, the Act Respecting the Collection of Certain Debts (ARCCD) governs the interactions between debt-collection professionals and third parties. The Government of Quebec further noted that the ARCCD was implemented as part of a multi-provincial initiative to harmonize debt-collection laws across the country.
13. The Government of Quebec explained that the provisions of the ARCCD effectively prohibit the disclosure of any information concerning the details or existence of a debt to persons other than the relevant debtor. The Government of Quebec submitted that since there can be no assurance that messages sent via ADADs will be delivered exclusively to the relevant debtor, ADAD messages must be drafted in a manner that presumes receipt by any possible party. The Government of Quebec argued that, therefore, debt-collection calls made via ADADs must not include a statement of purpose since the communication of such information to a third party would constitute a violation of the debtor’s fundamental right to privacy under the ARCCD. 
14. The Government of Quebec asserted that the Commission is required to respect the policy objectives listed in section 7 of the Act, particularly paragraph 7(i), which establishes the objective “to contribute to the protection of privacy of persons.” The Government of Quebec also highlighted the Commission’s statement in the Notice that it would review the matters in that proceeding in light of the policy objectives set out in section 7 of the Act.  
15. The Government of Quebec submitted that the unauthorized disclosure of personal information resulting from the application of paragraph 4(d) of the ADAD Rules in the case of debt collection not only fails to contribute to the protection of the privacy of persons, but violates this fundamental right. The Government of Quebec argued that, therefore, the Commission has failed to consider the basic principle of privacy, giving rise to substantial doubt as to the correctness of the Policy.  
16. The Government of Quebec requested that the Commission modify paragraph 4(d) of the ADAD Rules to indicate that when a person collecting debts is using an ADAD, the content of the message must be restricted to the information set out in the associated provincial legislation. The Government of Quebec noted that it modelled this proposed revision on the wording of paragraph 4(c) of the ADAD Rules regarding applicable calling-hour restrictions. The Government of Quebec submitted that implementation of its proposed revision would ensure the harmonious application of existing provincial and federal rules.
17. CAC/PIAC, the CCA, CorComm, EKOS, Forum, the MRIA, and the OSCA all supported the Government of Quebec’s application.
18. The CCA further argued that the Commission had erred by requiring ADAD debt-collection calls to include a brief description of purpose despite initially suggesting in the Policy that the inclusion of this information be merely allowed. The CCA also questioned whether the Government of Quebec’s application constituted a proper request to review and vary the Policy given that, in the CCA’s view, the record of the Policy lacked sufficient discussion of the disclosure requirements at issue.
19. The OSCA suggested that the Commission could reconcile any conflict between the ADAD Rules and the ARCCD by clarifying its interpretation of the provisions of the ADAD Rules in question. 
20. CAC/PIAC argued that rather than merely not requiring a debt-collection company that uses an ADAD to describe the purpose of the call, the Commission should prohibit such a description in the ADAD Rules in the interest of protecting the privacy of the intended recipients.
21. CorComm, EKOS, Forum, and the MRIA argued that market research activities should be exempt from the application of the ADAD Rules to preserve the integrity of survey data. These parties submitted that the requirement to identify the purpose of an ADAD call and on whose behalf an ADAD call is made is not in the public interest since such disclosure could bias the answers provided by a survey respondent, which would reduce the reliability of the data.
22. Forum and the MRIA also submitted that the application of the ADAD Rules to calls made for market research purposes was inconsistent with parliamentary intent. Specifically, they pointed out the exemption of survey activities from the National DNCL framework set out in section 41.7 of the Act. Forum requested that the Commission remove the brief purpose requirement from paragraph 4(d) of the ADAD Rules. CorComm and Forum also requested relief from the application of the information requirements for telemarketers set out in Part III, paragraph 16(c) of the UTRs in the case of calls made for survey or market research purposes.
23. EKOS and Forum argued that in the Policy, the Commission failed to address the arguments submitted by parties advocating the use of interactive voice response systems.^{Footnote 2} EKOS and Forum requested that the Commission permit the use of such features that comply with any identification requirements - for example, by allowing the recipients of survey calls to choose whether or not they wish to hear contact information.
24. Forum further submitted that the Commission should rescind the brief purpose requirement because the parties to the Notice were not notified that such a change was being contemplated, nor were they provided with an opportunity to comment on it.

Commission’s analysis and determinations

25. The Commission has identified the following issues to be addressed in this decision:
    • Did the Commission fail to take into consideration paragraph 7(i) of the Act in implementing the Policy?
    • Do the ADAD Rules conflict with provincial debt-collection legislation?

Did the Commission fail to take into consideration paragraph 7(i) of the Act in implementing the Policy?

26. The protection of the privacy of persons is an important policy objective under paragraph 7(i) of the Act. Section 47 of the Act requires the Commission to exercise its powers and perform its duties in implementing the policy objectives.^{Footnote 3} In paragraph 9 of the Notice, the Commission stated that it would review the matters in that proceeding in light of the policy objectives set out in section 7 of the Act and the Policy Direction.^{Footnote 4}
27. Under the UTRs, telecommunications placed for the sole purpose of recovering a debt do not constitute telemarketing telecommunications since they lack the element of solicitation. Such calls are therefore not subject to Part II (the National DNCL Rules) or Part III (the Telemarketing Rules) of the UTRs. However, Part IV (the ADAD Rules) of the UTRs applies universally to all calls made using ADADs, regardless of the purpose of the calls.
28. In Telecom Decision 94-10, the Commission considered banning the use of ADADs to limit the associated potentially negative consequences. The Commission indicated that through the development of its ADAD Rules, it sought to minimize the invasion of privacy.
29. The Commission has consistently considered that unsolicited ADAD calls pose a greater inconvenience and nuisance to Canadians than live voice calls, and that unsolicited ADAD calls are more likely to be perceived as an intrusion into personal privacy because they do not permit the called party to interact with the caller. Among other concerns, unsolicited ADAD calls prevent recipients from (i) making legitimate inquiries regarding the purpose of the call; (ii) establishing the caller’s identity; (iii) obtaining relevant contact information; and (iv) communicating to the caller other important information, for example, that the intended recipient of the call is not at the number dialed. Due to these and other considerations, the Commission reaffirmed broader restrictions on unsolicited ADAD calls than on unsolicited live voice calls in Telecom Decisions 2004-35 and 2007-48, as well as in the Policy.
30. The Commission takes seriously the protection of individual privacy. In fact, the protection of privacy has always been a prominent consideration in the Commission’s approach to regulating unsolicited telecommunications, including in the review of the UTRs that it initiated in the Notice. In the case of debt-collection activities, the Commission considers that the UTRs and provincial regulation both aim to protect personal privacy when callers cannot adequately verify the identity of the call recipient.
31. In light of the above, the Commission determines that it did not fail to take into consideration paragraph 7(i) of the Act in implementing the Policy.

Do the ADAD Rules conflict with provincial debt-collection legislation?

32. The Commission notes that the regulation of telecommunications in Canada falls exclusively within federal jurisdiction.
33. Under the ADAD Rules, the brief purpose requirement applies only to unsolicited telecommunications made through ADADs. There is no applicable provincial legislation that requires that debt-collection professionals use ADADs in the course of their communications. Debt-collection professionals are therefore free to use other forms of communication, such as live calls, to carry out their activities in compliance with all applicable legislation.
34. With respect to the alleged conflict between paragraph 4(d) of the ADAD Rules and existing Quebec provincial rules applicable to debt-collection activities, the Commission considers that neither the Government of Quebec nor the interveners have demonstrated the impossibility for them to (i) comply with both frameworks, or (ii) craft a statement of purpose that is accurate and in compliance with applicable provincial debt-collection laws, and that does not disclose personal information.
35. Accordingly, the Commission determines that the ADAD Rules do not conflict with existing provincial debt-collection legislation, and finds it unnecessary to modify paragraph 4(d) of the ADAD Rules as set out in the Policy.

Other matters

36. Regarding Forum’s argument that parties did not have sufficient opportunity to comment on the brief purpose requirement, the Commission notes that concerns about consumers terminating ADAD calls without understanding the purpose for which the call was made were raised in the first round of comments in the proceeding initiated by the Notice. As provided for in the Notice, parties and other interested persons had two subsequent opportunities to make submissions related to these concerns.
37. The Commission considers that many of the arguments submitted by the market research industry concerning how the ADAD Rules may impact the integrity of research data differ significantly from the Government of Quebec’s application, despite being filed in response to that application. Specifically, the Government of Quebec’s application calls attention to the restrictions imposed by provincial legislation and how, in the Government of Quebec’s view, the brief purpose requirement conflicts with those restrictions. The Commission notes that there is a lack of similar provincial legislation governing market research activities.
38. Accordingly, the Commission finds that the impact on market research activities of the disclosure requirements for ADAD calls, including the longstanding requirement to disclose the identity of the entity on whose behalf the call is made and the more recent requirement to include a brief statement of purpose, falls outside the scope of this proceeding.
39. Similarly, the Commission finds that the submissions made by EKOS and Forum with respect to the use of interactive voice response technology to provide identification messages during an ADAD call are outside the scope of this proceeding, since they do not relate to the alleged conflict between regulatory frameworks raised by the Government of Quebec.
40. Regarding the amendments proposed by CorComm and Forum to Part III, paragraph 16(c) of the UTRs,^{Footnote 5} calls made solely for the purpose of debt collection or market research do not fall within the definition of telemarketing under the UTRs, as long as they do not entail any direct or indirect forms of solicitation. For that reason, Part III, section 16(c) of the UTRs does not normally apply to such calls. Accordingly, the Commission finds that CorComm’s and Forum’s interventions in this regard are also outside the scope of this proceeding.
41. For greater clarity, a telecommunication in which there is no attempt to solicit, including one initiated for the sole purpose of collecting a debt or conducting a survey, is captured by the UTRs only if it is made through the use of ADADs. In this case, callers must ensure compliance with the conditions set out in Part IV of the UTRs.

Characterization of the additional applications

42. The Commission notes that the additional applications are substantially similar to the Government of Quebec’s application, since they share arguments with respect to the brief purpose requirement and any alleged resulting conflicts with provincial regulation, section 7 of the Act, and the Policy Direction.
43. In Telecom Information Bulletin 2011-214, the Commission revised its guidelines for review and vary applications (the Guidelines). The Guidelines provide that for the Commission to exercise its discretion pursuant to section 62 of the Act, applicants must demonstrate that there is substantial doubt as to the correctness of the original decision, for example due to
    • an error in law or in fact;
    • a fundamental change in circumstances or facts since the decision;
    • a failure to consider a basic principle which had been raised in the original proceeding; or
    • a new principle which has arisen as a result of the decision.
44. The Guidelines for review and vary applications include criteria for distinguishing between applications that properly constitute a request to review and vary a Commission decision, and applications that would be more properly considered as new applications made pursuant to Part 1 of the Rules of Procedure. Specifically, the Commission noted, in paragraph 10 of Telecom Information Bulletin 2011-214, that

    Where an application raises substantial doubt as to the correctness of the original decision at the time it was made, the Commission will generally consider the application to be a review and vary application. However, where the application essentially relates to the continuing correctness of a decision rather than its original correctness, the application will generally be treated as a new application.

45. The public consultation launched through the Notice constituted a comprehensive review by the Commission of the UTRs. The Commission’s determinations set out in the Policy represent the Commission’s conclusions as a result of this consultation.
46. The Commission acknowledges that the brief purpose requirement was newly introduced in the Policy. The Policy was published on 31 March 2014, and the additional applications were all submitted less than five months later. Since none of the applicants submitted evidence establishing a material change in circumstances since the publication of the Policy, the Commission considers that the issues raised with respect to the brief purpose requirement are matters of original rather than continuing correctness. As indicated above, the Commission considers such applications to be review and vary applications. 
47. Section 62 of the Act provides the Commission with the discretionary power to review and vary or rescind any of its decisions. Subsection 71(1) of the Rules of Procedure provides that an application to review, rescind, or vary a decision of the Commission must be filed within 90 days after the date of the decision. This limitation is also referenced in the Guidelines.
48. While the Government of Quebec’s application was filed within the prescribed deadline, each of the additional applications was filed after this deadline. None of the additional applications contained a request to extend this deadline, and no submissions were made with respect to the appropriateness of granting such an extension pursuant to subsection 71(2) of the Rules of Procedure.

Conclusions

49. For the reasons set out above, in response to the Government of Quebec’s application, the Commission determines that it did not err in its amendments to the UTRs in the Policy, that it acted consistently with section 47 of the Act in implementing the Policy, and that restrictions on the use of ADADs do not conflict with the law of the Province of Quebec.
50. The Commission further determines that the additional applications are review and vary applications. As such, these applications were filed after the applicable deadline, and it is not appropriate or necessary for the Commission to accept and consider them.
51. In light of all the above, the Commission denies the above-mentioned applications. The Commission also denies the CCA’s request for a stay of investigations by Commission staff into the CCA’s compliance with the ADAD Rules, which has been rendered moot by this decision. 

Secretary General

Related documents

• Review of the Unsolicited Telecommunications Rules, Compliance and Enforcement Regulatory Policy CRTC 2014-155, 31 March 2014
• Review of the Unsolicited Telecommunications Rules, Compliance and Enforcement Notice of Consultation CRTC 2013-140, 20 March 2013, as amended by Compliance and Enforcement Notice of Consultation CRTC 2013-140-1, 31 May 2013
• Revised guidelines for review and vary applications, Telecom Information Bulletin CRTC 2011-214, 25 March 2011
• Unsolicited Telecommunications Rules framework and the National Do Not Call List, Telecom Decision CRTC 2007-48, 3 July 2007, as amended by Telecom Decision CRTC 2007-48-1, 19 July 2007
• Review of telemarketing rules, Telecom Decision CRTC 2004-35, 21 May 2004
• Use of telephone company facilities for the provision of unsolicited telecommunications, Telecom Decision CRTC 94-10, 13 June 1994

Date modified:

2015-03-31