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TRANSCRIPT OF PROCEEDINGS BEFORE
THE CANADIAN RADIO‑TELEVISION AND
TRANSCRIPTION DES AUDIENCES DEVANT
LE CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
Proceeding to establish a national do not call list
framework and to review the telemarketing rules /
Instance visant à établir le cadre de la liste nationale
de numéros de téléphone exclus et à examiner
les règles de télémarketing
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 2, 2006 Le 2 mai 2006
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès‑verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio‑television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Proceeding to establish a national do not call list
framework and to review the telemarketing rules /
Instance visant à établir le cadre de la liste nationale
de numéros de téléphone exclus et à examiner
les règles de télémarketing
BEFORE / DEVANT:
Richard French Chairperson / Président
Elizabeth Duncan Commissioner / Conseillère
Barbara Cram Commissioner / Conseillère
Rita Cugini Commissioner / Conseillère
Stuart Langford Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Madeleine Bisson Secretary / Secrétaire
Stephen Millington Legal Counsel /
HELD AT: TENUE À:
Conference Centre Centre de conférences
Outaouais Room Salle Outaouais
140 Promenade du Portage 140, Promenade du Portage
Gatineau, Quebec Gatineau (Québec)
May 2, 2006 Le 2 mai 2006
TABLE DES MATIÈRES / TABLE OF CONTENTS
PAGE / PARA
Presentation by Advocis 10 / 57
Questions by the Commission 20 / 115
Presentation by CADRI 60 / 405
Questions by the Commission 65 / 439
Presentation by the Canadian Bankers Association 96 / 672
Questions by the Commission 97 / 680
Presentation by the Association of 132 / 940
Questions by the Commission 137 / 970
Présentation par l'Union des consommateurs 160 / 1127
Questions by the Commission 197 / 1307
Presentation by Primerica Financial Services 227 / 1499
Questions by the Commission 233 / 1534
Presentation by the Canadian Marketing Association 276 / 1865
Questions by the Commission 284 / 1914
Gatineau Quebec / Gatineau (Québec)
‑‑‑ Upon commencing on Tuesday, May 2, 2006
at 0920 / L'audience débute le mardi
2 mai 2006 à 0920
1 LE PRÉSIDENT : Mesdames et messieurs, à l'ordre, s'il vous plaît. Order, please.
2 Good morning, ladies and gentlemen. Welcome.
3 My name is Richard French. I am the Vice‑Chairperson of Telecommunications for the Commission.
4 With me today on the panel: on my left, Elizabeth Duncan, Commissioner for the Atlantic Region; Barbara Cram on my immediate right, Commissioner for Manitoba and Saskatchewan; extreme left, Rita Cugini, Commissioner for the Ontario Region; extreme right, Stuart Langford, National Commissioner.
5 We have a number of Commission staff here as well.
6 Seated at the table are Madeleine Bisson, Consultation Secretary; Commission counsel, Stephen Millington; Sean Kelly in the middle; Gerry Lylyk, Director of Consumer Affairs; and their team members across the back, Susan Gardiner, Mary‑Louise Hayward, Leah Ackerman, Kevin Pickel and Kelly Anne Smith.
7 Au cours des prochains jours, nous entendrons les présentations des parties intéressées à comparaître devant nous. De plus, nous étudierons attentivement tous les documents déposés dans le cadre de la présente instance, tant ceux des parties qui comparaissent cette semaine que les autres parties.
8 De nombreux Canadiens considèrent les appels de télémarketing comme une atteinte à la vie privée. De récentes modifications à la Loi sur les télécommunications, la Loi modifiée, visent à mettre en place un cadre permettant d'atténuer les inconvénients associés à certains aspects du télémarketing non sollicité.
9 So in that context and the framework of potential invasion of privacy by telemarketing, the amended Act, when proclaimed ‑‑ and it has not yet been proclaimed ‑‑ will provide the Commission with the authority to establish a national Do Not Call List and to delegate the administration of that national Do Not Call List and related functions to a third party.
10 The amended Act will also empower the Commission to levy administrative monetary penalties, so called AMPs, for violations of its telemarketing rules.
11 The amended Act sets out a list of telemarketing and telemarketing‑like activities which will be exempt from any of the requirements or prohibitions established by the Commission in relation to the national Do Not Call List.
12 Such telemarketing will not necessarily be exempt from other aspects of the framework which the Commission will establish consequent to the powers and responsibilities vested in it by the Act.
13 Just an impression that some of the exempt parties ‑‑ that is, exempted from the national Do Not Call List ‑‑ may also be exempt from any controls on telemarketing. Not true, or at least not necessarily true under the Act.
14 As noted in the Public Notice CRTC 2006‑4, a key step in developing the national Do Not Call List will be the selection of the Do Not Call List operator and the development of the terms according to which it will be operated.
15 As you may be aware, a Consortium formation CISC subcommittee has been established.
16 For those of you who are not familiar with the delightful acronyms that festoon our business of regulation of telecom, CISC is the CRTC Interconnection Steering Committee.
17 In parallel with the operation of this subcommittee, a Do Not Call List operations CISC subcommittee ‑‑ how would you like to be the Chairman of that?
18 A Do Not Call List operations CISC subcommittee will examine a number of issues relating to the functioning of the national Do Not Call List.
19 The address and resolution of these matters should enable the Consortium to finalize the terms and conditions of the contractual arrangement with the Do Not Call List operator.
20 For today, you may assume that all of the Commissioners will have read your written submissions and are therefore familiar with your organization. Unless otherwise indicated, parties will be allotted a maximum of ten minutes to make their presentation.
21 The consultation Secretary will advise you when you have one minute remaining.
22 I would ask parties to concentrate on the essential message which you seek to leave with the Commission and to do so within the time allotted.
23 Generally Commissioners' questions, as well as questions by Commission counsel, if any, will come after each party has completed its presentation.
24 Parties wishing to make a closing statement will be allotted five minutes in the reverse order of their presentation after all the parties have made their presentations.
25 Je voudrais préciser que le but de l'audience est d'établir des principes, des politiques et des pratiques qui serviront l'intérêt public en assurant l'efficacité de la mise en oeuvre de la Loi que le Parlement a adopté.
26 Je demanderais à tous les participants à cette audience de revoir la déclaration préliminaire à la lumière de ce principe.
27 I would like to point out that the purpose of the hearing is to help the CRTC to implement the revised law in an effective and efficient way. What we are really looking for in your interventions today is specific suggestions and advice in that respect.
28 Parliament has passed a law. We don't need to spend time reconsidering that law but rather how it will be applied, what the pros and cons of the various questions or aspects of application raise from the point of view of your organization and your expertise.
29 Si vous avez d'autres questions sur le déroulement de la consultation, je vous demanderais de vous adresser à la Secrétaire de la consultation, madame Madeleine Bisson.
30 If you have any other questions, please ask the Secretary of the proceeding, Madeleine Bisson.
31 I now invite her to review some additional housekeeping matters.
32 LA SECRÉTAIRE : Merci, Monsieur le Président.
33 Avant de procéder, seulement quelques mises au point qui contribueront au bon déroulement de cette consultation publique.
34 When you are in the hearing room, we would ask you to please turn off your cell phones, pagers, Blackberries and other text messaging devices as they are an unwelcome distraction for participants and Commissioners, and they cause interference on the internal communication system used by the translators and court reporter.
35 We are counting on your co‑operation in this regard throughout the consultation.
36 As indicated in the Organization and Conduct letter issued on 7th April 2006, except for today, we propose to sit from 9:00 a.m. to 6:00 p.m. each day. We will take a 90‑minute lunch break, as well as a 15‑minute mid‑morning and mid‑afternoon break.
37 While we do not anticipate sitting into the evenings, it may be necessary if the consultation falls behind schedule.
38 L'offre de comparution pour cette consultation, telle que publiée à l'Annexe A de la lettre d'organisation et de déroulement de l'audience du 7 avril 2006 a été révisée. Vous pouvez vous procurer une copie de l'agenda révisé à la Salle Papineau.
39 The Papineau Room will serve as the public examination room for this consultation. The room is open to all parties and to the public for the duration of the consultation and contains a complete copy of the record.
40 Furthermore, please leave at the reception table 25 copies of the text of your oral presentation for the Commission's use and one copy for each of the 20 other parties presenting at the consultation.
41 Pour faciliter la distribution de vos présentations aux autres parties, vous pouvez déposer les 20 copies demandées sur la table à l'arrière de la salle. Je rappelle aux parties que les présentations verbales sont distribuées par commodité seulement et ne font pas partie du dossier public de cette consultation.
42 Also, parties will be asked to come forward when making their presentation. Spokespersons will be required to present themselves, their team members and to proceed with their presentation within the prescribed timeframe.
43 Finalement, afin d'assurer que la transcription de cette consultation soit la plus exacte possible, veuillez vous assurer que votre micro est ouvert lorsque vous vous adressez au Conseil.
44 A copy of each day's transcript will be available in the Papineau Room at the start of the next consultation day, and the full set of the transcripts will be posted on the Commission's website shortly after conclusion of this consultation.
45 Parties who wish to purchase copies of transcripts or other services from Media Copy should deal with them directly.
46 Maintenant, Monsieur le Président, nous allons poursuivre avec les comparutions.
47 LE PRÉSIDENT : Madame la Secrétaire, j'ai oublié.
48 My conscience and confessor in these matters, Commissioner Cram, reminds me that I had committed to our staff to underline to you that there are some specific areas, both empirical and normative, where we will be asking for some written support, further advice on your part, which we call in our jargon undertakings.
49 The Commission staff and/or the Commission's legal staff will be seeking those undertakings from you.
50 I would only request if you would be so kind as to consider whether you can make a further constructive contribution by responding to those undertakings.
51 Do we have any other details about that at this point? No.
52 I just mention that. You will be contacted if your organization is among those from whom we seek these undertakings. Thanks.
53 Je m'excuse, Madame la Secrétaire.
54 LA SECRÉTAIRE : Merci, Monsieur le Président.
55 I will call on Advocis to make its presentation.
56 Mr. McLeod, could you please introduce yourself and your panel.
PRESENTATION / PRÉSENTATION
57 MR. McLEOD: Good morning, Commissioners, Commission staff and fellow presenters.
58 I am Gary McLeod, Chair of the National Board of Advocis, which is the Financial Advisors Association of Canada.
59 I am joined by Sara Gelgor, our Vice‑President of Regulatory Affairs at Advocis.
60 Thank you for the opportunity to appear before you. Before I proceed to the substance of my presentation, please allow me to provide a brief overview of Advocis.
61 Advocis is the largest voluntary professional membership association of financial advisors, with 12,000 members across Canada. Our members are financial advisors licensed to distribute life and health insurance, mutual funds and other securities.
62 Advocis members provide financial and product advice to millions of Canadians across a variety of distinct areas, including estate and retirement planning, wealth management, risk management and tax planning.
63 Our association traces its origins to the founding of the Life Underwriters Association of Canada and this year marks our 100th anniversary.
64 Personal communication is an integral component of a professional financial advisor's business. Professional financial advisors interact daily with numerous consumers, often for the first time through personal referrals and other means as part of their business development process.
65 Financial advisors compete effectively in the marketplace and have been successful in doing so, provided the established regulatory environment promotes a level playing field for all participants. Financial advisors also serve to represent the views of their clients from a consumer protection standpoint in the important debates of the day.
66 We support the government's efforts to alleviate telemarketing irritations for Canadians, while striving to maintain a competitive environment for business.
67 Advocis educates its members through practice standards and an established Best Practices Manual.
68 Advocis standards are based on prescribed obligations and often exceed even the most stringent regulatory requirements.
69 Today we wish to highlight the following key issues pertaining to the framework of a national Do Not Call List: exempting provincial financial services licensees; defining the existing business relationship exemption; referrals; access to the Do Not Call List; and investigation of complaints and assignment of penalties.
70 I will speak to the first three points and my colleague Sara Gelgor will address the final two.
71 Our comments focus on ensuring financial advisors are able to operate effectively within a national Do Not Call List framework that meets consumers' needs.
72 The financial services industry is one of the most heavily regulated sectors in Canada. Financial advisors who sell insurance must be licensed by the appropriate government body or agency for the province in which they operate, as well as meet the requirements of any other jurisdiction in which they conduct business.
73 The respective securities commission or commissions must similarly license those who also sell securities. Approximately three‑quarters of Advocis members are licensed to distribute both insurance and mutual funds and therefore are already subject to regulatory oversight my multiple regulators, possibly in multiple jurisdictions.
74 In addition to meeting requirements through regulation, proprietary codes of conduct are a cornerstone in protecting consumers within the financial services industry.
75 Advocis and its predecessor organizations have had a professional code of conduct in place for 100 years. Advocis members must abide by our code of professional conduct in all of their business activities as a condition of membership.
76 Failure to comply with any of the code's nine overriding principles can lead to an investigation and possible disciplinary action, including expulsion from membership and reporting to the appropriate regulatory authority.
77 Furthermore, the financial services industry is a leader in administering effective and meaningful complaint resolution structures. Given this backdrop of a stringent regulatory regime, coupled with well‑established self‑disciplinary safeguards, we strongly recommend individuals licensed by an insurance regulatory body or securities commission be exempt from the national Do Not Call List restrictions.
78 The ability to call those with an existing business relationship is key in operating a national Do Not Call List that supports business needs. Financial advisors may find themselves in a unique position, although we suspect this applies to other professions which requires the Commission's attention.
79 When a financial advisor sells his or her block of business to another advisor, it is common practice for the purchasing advisor to often introduce him or herself to the new set of clients by phone. While clients typically stay with the new advisor, some may choose to work with another advisor.
80 Clearly these calls of introduction if placed to a client registered on the national Do Not Call List should not be considered as unsolicited. We recommend the rules support the existing business relationship exemption clearly provide for introductory calls where broker business has changed hands.
81 Another aspect requiring further clarification is the treatment of calls made under the existing business relationships exemption within a group of companies.
82 Specifically, would a company within the group without a direct relationship to a client of another member company be permitted to contact the client if they are registered on the national Do Not Call List?
83 We note that outside of the group of companies such calls would be prohibited. The only reason such a call may be allowed within a group of companies is because one member company has a direct relationship, no matter how minor, with the individual being called.
84 Allowing a member company with a corporate group to contact a registrant of the national Do Not Call List who has a relationship with another organization within the group will give multi‑disciplinary companies an unfair advantage over companies outside of the group.
85 We do not believe that in striving to protect consumers from unsolicited telemarketing calls it was Bill C‑37's intention to tilt the playing field among large and small business.
86 We recommend the existing business relationship exemption be based on separate legal entities with a distinct product line or a function within a group of companies.
87 Personal referrals are the foundation upon which professional financial advisors develop their client base and occur only when an advisor and client have an existing bridge of trust.
88 Ideally, the client will personally introduce the individual to the financial advisor. However, if this is not possible, it is common practice for the financial advisor to carry out the client's suggestion by providing background information about his or her services and placing an introductory call to the specific individual referred.
89 Even where the individual being called is registered on the national Do Not Call List, we suggest referral calls are not unanticipated and should not be considered as violating the Do Not Call requirements.
90 We strongly recommend that at a minimum individuals licensed by an insurance regulatory body or securities commission be permitted to undertake word‑of‑mouth and personal telecommunications within the framework of a national Do Not Call List registry.
91 We also recommend calls to a related person as defined by the Income Tax Act be supported. Limiting calls to the Income Tax definition of a related person, individuals connected by blood, marriage, common law partnership or adoption, will set clear parameters and restrict range of calls placed.
92 I would like now to invite my colleague, Sara Gelgor, to comment on the operations of the national Do Not Call List framework.
93 MS GELGOR: Thank you, Gary.
94 On the issue of access, we believe the national Do Not Call List must be easy to access. Many financial advisors are small business operations without sophisticated computer networks, often due to cost considerations. Financial advisors must be able to obtain and manage the information required easily and at minimal cost.
95 The fee to access the registry must be fair and reflective of a business' size and usage of the Do Not Call List information.
96 Advocis has many years of complaint resolution experience through the Chartered Life Underwriter Institute's well established process. The various exemptions to the national Do Not Call List framework and potential imposition of violation penalties makes it critical that clear guidelines on the investigation of complaints, issuance of violation notices and imposition of penalties be developed to ensure all stakeholders have a clear understanding and accurate expectation of the Do Not Call framework.
97 Establishing a threshold to investigate complaints will help apply investigative resources efficiently and follow a risk‑based approach to regulation, a concept Advocis strongly endorses.
98 Also, defining the timeframe in which consumers must log any complaints of violating calls to the Do Not Call List operator will help identify patterns of non‑compliance and allow timely action to be taken to clamp down on any troubling trends.
99 Advocis supports a 30‑day grace period during which time calls made to a new registrant would not be considered as being in violation. In other words, the clock should not start to tick until 30 days after an individual has joined the Do Not Call registry.
100 We believe a 30‑day time period will give businesses the flexibility to access and analyze the Do Not Call List on a periodic basis ‑‑
101 THE SECRETARY: I'm sorry, Ms Gelgor, you have one minute to conclude.
102 MS GELGOR: All right.
103 ‑‑ while protecting consumers by ensuring the overall integrity of the list itself.
104 Prolonging this grace period will simply allow companies engaged in telemarketing campaigns to extend their access to consumers registered on the Do Not Call List unnecessarily.
105 The application of penalties to violators of the national Do Not Call List must balance the need to effectively deter future non‑compliance against the need to ensure penalties are proportionate to the infraction at hand and applied fairly.
106 We support a graduated penalty scheme with a range of punishments of both a monetary and non‑monetary nature and an escalating scale based on the severity and repetition of infractions.
107 The legislation sets monetary penalties at a maximum of $1,500 for an individual and $15,000 for corporations per infraction. We recommend these categories be further defined to ensure penalties are applied fairly and consistently.
108 For example, financial advisors may incorporate their businesses primarily for succession planning reasons but in reality may operate as a one‑person shop.
109 We believe it would be unfair to penalize such a person at the corporate level when the individual is essentially self‑employed. Therefore, we would recommend at a minimum a single shareholder corporation be defined as an individual for the purpose of assigning penalties.
110 We applaud the establishment of a cost‑effective, simple‑to‑use national Do Not Call List registry that meets consumers' desire to reduce unwanted calls from telemarketers while fostering an environment conducive for business.
111 The final outcome must provide an appropriate balance to ensure the needs and specific circumstances of business, in this case the thousands of professional advisors offering advice to millions of Canadians, are supported.
112 Thank you for your time and attention today. We would be pleased to answer any questions you may have.
113 THE CHAIRPERSON: Thank you very much. Welcome to the hearing.
114 Commissioner Duncan.
115 COMMISSIONER DUNCAN: Good morning.
116 First of all, with respect to the overriding Do Not Call List rule, in paragraph 22 of its submission The Companies propose that the key Do Not Call List rule should read as follows:
"No person or organization shall initiate a telemarketing call to a person or organization who is validly listed in the National Do Not Call database unless the person or organization from whom the telemarketing call originates is exempt pursuant to section 41(7)(1) of the amended Telecommunications Act."
117 We are first interested in your view on the definition they have recommended and if you think there are any changes necessary.
118 MS GELGOR: As we had indicated in your remarks, we believe that the definition should be limited to the separate legal entities as opposed to the group of companies.
119 COMMISSIONER DUNCAN: I think probably the definition would cover that when it refers to "person or organization".
120 MS GELGOR: But the organization is the entire group of companies.
121 COMMISSIONER DUNCAN: So you would rather see a reference to separate legal companies?
122 MS GELGOR: That is correct.
123 COMMISSIONER DUNCAN: Thank you.
124 With respect to the application of the DNCL rules to faxes, we are wondering if you feel the DNCL rules should apply to unsolicited faxes and if there are any technical, financial or administrative issues with applying those rules to unsolicited faxes.
125 MS GELGOR: We do believe that they should apply to unsolicited faxes. We do not have any comments with regard to the cost implications.
126 COMMISSIONER DUNCAN: And no comments on the technical. You are satisfied.
127 MS GELGOR: Yes.
128 COMMISSIONER DUNCAN: Thank you.
129 With regard to access to the list by small telemarketers ‑‑ and you have sort of touched on that ‑‑ we are wondering do smaller sized operators require a different Do Not Call List regime to ensure their viability? And how would you define such a regime?
130 Should the operators be classified by certain quantifiable data such as gross income and given alternatives to accessing the database based on their classification?
131 MS GELGOR: We do not have a position as to how the smaller operators might be classified. We have certainly identified that there may be different implications, both from a cost and compliance perspective.
132 We have looked at either gross income or number of employees and our concern is where do you draw the line?
133 For example, if you are looking at employees and you set the line at five employees, if somebody has six employees is that really equitable treatment?
134 We do not have any recommendations as to where you would draw the line, but in talking about the imposition of the penalties and infractions we have suggested that there be a range and that there be discretion.
135 We recommend a similar approach with respect to how small operators would be treated with respect to accessing the list.
136 COMMISSIONER DUNCAN: That leads into my next question.
137 In your submission, and I think again in your remarks this morning, you indicate a financial advisor may decide it is best to operate his or her business as an incorporated entity.
138 MS GELGOR: Right.
139 COMMISSIONER DUNCAN: But in reality really operate as a one‑person shop.
140 I am wondering, first of all, what percentage of your 12,000 members would fall into this category, would you estimate?
141 MR. McLEOD: I wish I could give you an exact answer. It is a high percentage of our members, given the changes in the industry over the last few years.
142 It would be greater than 60 percent.
143 COMMISSIONER DUNCAN: You suggest some consideration be given to defining a single shareholder corporation as an individual rather than a corporation for the purpose of assigning penalties.
144 I think some of the single shareholder corporations could grow to be quite large in terms of revenue and employees, and I think we sort of touched on that a few moments ago.
145 Can you suggest what other criteria we might take into consideration to determine whether a single shareholder corporation should be considered as an individual rather than a corporation for the purpose of assigning penalties?
146 MS GELGOR: Again, you are right in touching on the point that some of these corporations do grow to become very large, even family owned, businesses.
147 Our members typically are small businesses and they remain as such. When I talked about the example of a single shareholder corporation, that would be one way of looking at it.
148 Typically the businesses are inter‑generational and the business is passed on to family members. But they do remain fairly small.
149 COMMISSIONER DUNCAN: You see, my concern is with ‑‑ you could still be small in terms of ownership but have a very successful large business in terms of revenue and even the number of employees.
150 MS GELGOR: Right.
151 COMMISSIONER DUNCAN: That is just one of the things we will have to consider. Thank you.
152 MS GELGOR: Okay.
153 COMMISSIONER DUNCAN: In paragraph 77 of the CMA submission, the CMA submitted that the Commission should adopt a regulation that would clarify that telemarketers may contact a consumer by telephone even if he or she is on the Do Not Call List if the telemarketer has received consent to do so.
154 So the consent would override the Do Not Call List.
155 First of all, do you agree with the CMA's position that telemarketers should be able to contact a consumer by telephone if the marketer has received consent to do so, even if that person is on the Do Not Call List?
156 MS GELGOR: The consent would have to be very specific rather than a broad consent that one might sign in some kind of an application form.
157 The concerns that we would have would be that there would be the overriding of the original intention that was expressed by the consumer.
158 I think there would have to be some kind of parameters within which a consumer might provide specific consent, but it would have to be very, very specific to the contact.
159 COMMISSIONER DUNCAN: I think we agree on that point, especially if it were to lead to an investigation at some point. It would have to be documented or in some form that would substantiate or justify the contact.
160 Would you agree?
161 MS GELGOR: Yes.
162 COMMISSIONER DUNCAN: Thank you.
163 I would like to get your comments on the value and need to maintain internal Do Not Call Lists.
164 What are the issues associated with specific organizations maintaining their own Do Not Call Lists in addition to the national Do Not Call List?
165 I have four questions, so I will read you all four and then I can review them as we go, so you don't have to feel like you have to remember them all at once.
166 In your response, could you:
167 (1) explain the benefits of such an approach, having both lists, or not;
168 (2) whether there are specific circumstances that necessitate the need to maintain internal Do Not Call Lists;
169 (3) how internal Do Not Call Lists would integrate with the national list; and
170 (4) how such an approach would not introduce complexity, duplicate effort or increase regulatory burden that is not cost justified or warranted.
171 Before we start to deal with each question, I will just preface the comment with a recommendation or a comment from the Registered Education Savings Plan Dealers Association.
172 They feel that it is reasonable to require telemarketers to maintain internalists to accommodate consumers who may not wish to register on the national list for all purposes but would like to prevent contact from specific companies.
173 I mention that sort of to set the stage. That is one reason that we have been given for maintaining two lists.
174 So the first question is if you could explain in your view how maintaining individual internal Do Not Call Lists would be a benefit to the system.
175 MS GELGOR: Certainly the point that you have just addressed I think would be a primary reason where a consumer does not want to block out all calls but there may be particular companies with which the consumer does not want to have dealings.
176 So that would probably be the most clear example of where two lists would benefit.
177 My concern with having the two lists, again focusing on the types of businesses our association represents, is really the burden and the cost that it would impose, where we are talking about a small business having perhaps a single or two people operating the business.
178 It is very difficult to comply with all of the provincial licensing requirements, the regulatory requirements, the anti money laundering requirements. And then a Do Not Call List requirement that is internal and specific to the company over and above any national list, our worry is that it would impose undue costs and compliance requirements.
179 Short of areas where there would be a clear benefit to consumers ‑‑ and the one that we have just talked about is one ‑‑ where there may be exemptions in place, you would certainly want to have internal lists there as well.
180 We would not support a broad recommendation for having two lists across the board for everybody.
181 COMMISSIONER DUNCAN: The challenge we get into then of course is administering. It is easier if the rules are sort of across the board. But that's all right.
182 Currently you mention 12,000 members. Those members would currently maintain a Do Not Call List, so they would have the processes in place for that.
183 Would that be correct?
184 MS GELGOR: They may or they may not.
185 COMMISSIONER DUNCAN: All right.
186 I am just wondering, trying to imagine. How many calls would we be talking about that they would be making in the run of a month? How difficult would it be?
187 I am thinking if you had the numbers entered in some type of a computer program that sorted them in numerical order, how difficult would it be to maintain an internal list?
188 MS GELGOR: It would vary depending on the type of business and what stage of maturity it would be at. Somebody in a situation like Gary, our Chair, would not be severely impacted. But a new advisor in the community certainly has to start out his or her business and is looking at opportunities to reach out to potential new clients.
189 Similarly, Gary pointed to the example where a broker business is sold. Clearly there an advisor would need to be able to make introductory calls.
190 So keeping the list and trying to grow and market a business while respecting consumers' privacy is certainly going to be a challenge.
191 COMMISSIONER DUNCAN: Would you agree, though, that with all the software programs that we have available, it probably wouldn't be too difficult to maintain an internal list?
192 And of course that is the expectation today.
193 So what would follow from that, then, would be what would be involved. And I am taking into consideration your concerns.
194 What would you see being the difficulty with integrating that list with a national list?
195 MS GELGOR: Again, it would depend on the size and the nature of the business. For a very small company, for a financial advisor who is starting out, the requirements may be significant.
196 COMMISSIONER DUNCAN: And that I suppose will be an aspect of what the CISC Operation Committee is working on, because they will determine the costs and the manner in which smaller operators would be able to check the numbers.
197 You don't need to check against thousands of numbers if you are only operating in one exchange. So I am sure that they will take all of that into consideration.
198 That's fine.
199 Is there anything else you would like to add to that?
200 MS GELGOR: No.
201 COMMISSIONER DUNCAN: Thank you.
202 I think that is a big issue, the requirement to maintain both. So it is good to get as much on the record as we can.
203 With respect to automatic dialling announcing devices, ADADs, the CMA has recommended the Commission allow for companies to make digitally pre‑recorded voice calls through ADADs for business‑to‑business relationships, telemarketing to consumers with whom there is an existing business relationship, and for telemarketing to consumers who have provided their consent to receive such calls.
204 Could you comment on the CMA's recommendation.
205 So that is that people be allowed to use the ADADs for business‑to‑business, telemarketing to consumers with whom they have an existing business relationship and for telemarketing to consumers who have provided consent to receive such a call.
206 MS GELGOR: We believe that the general Do Not Call framework should apply.
207 COMMISSIONER DUNCAN: Okay; thank you.
208 Right now they are not allowed. ADADs are not allowed.
209 So you don't have any opinion.
210 MS GELGOR: We do not have an opinion on that.
211 COMMISSIONER DUNCAN: That's fine; thank you.
212 In paragraph 12 of Contact New Brunswick's submission, they raise the question, and I quote:
"If all businesses that call their customers are required to comply with the legislation, what will be the impact on those businesses of installing the necessary telephony customer relationship management software and systems required to keep them compliant?"
213 Based on your experience, what would you estimate it would cost for a new business or a business that has not previously had to adhere to the Do Not Call List to access and adhere to the Do Not Call List system?
214 That is outside of the fee that you pay for accessing the data.
215 I am thinking here in terms of any capital cost computers or software, any other items.
216 MS GELGOR: We do not have that information in front of us, but we could undertake to provide it to you at some point.
217 COMMISSIONER DUNCAN: That would be great, thank you, if you would.
218 What are your views on whether third party providers such as call centres, ad agencies and call brokers should be allowed to access the Do Not Call system on behalf of another organization in order to scrub the list?
219 Should such access be granted and controlled?
220 And should third party providers be required to identify on whose behalf they are accessing the list?
221 MS GELGOR: Sorry, could you repeat that question, please.
222 COMMISSIONER DUNCAN: Sure. This is dealing with third party providers, so somebody subcontracting the job to a call centre or an ad agency or a call broker.
223 We are wondering if those parties should be allowed to access the list or if access should just be limited to telemarketers or the organizations themselves.
224 And should such access be granted, how would it be controlled?
225 And should third party providers be required to identify on whose behalf they are accessing the list?
226 I guess the first thing is: Do you think that those third party providers should be allowed to access the system?
227 MS GELGOR: I'm sorry, I don't have a view on that. The Association does not have a view.
228 COMMISSIONER DUNCAN: That's fine; thank you.
229 With respect to fees or potential rate structure, I know you have made a couple of comments on the fees being graduated or at least taking into consideration the size of different organizations.
230 The Companies have suggested the fees for making use of the national Do Not Call List could be applied annually, quarterly, monthly or each time the list is accessed.
231 The Companies suggest the fees could be charged on a per‑access basis, which they suggest might be the most equitable.
232 In the U.S. the fees are charged based on the number of area codes for which information is retrieved, with the first five being provided at no charge.
233 In the U.K. the fee structure is based on the type of licence ‑‑ and I think there are four types of licences ‑‑ and the quantity of area codes an entity wishes to access.
234 What type of rate structure do you think would best serve Canadian organizations?
235 Is there a particular structure that would be better suited to smaller organizations?
236 MS GELGOR: We support an approach that would be based on a per‑use basis. For our members, depending on the size, they would be impacted differently.
237 COMMISSIONER DUNCAN: So as long as it is technologically cost‑effective to do so, you would certainly agree that would be an equitable way to do it?
238 MS GELGOR: That's right.
239 COMMISSIONER DUNCAN: That's great.
240 That concludes my questions, Mr. Chairman.
241 THE CHAIRPERSON: Thank you, Madam Commissioner.
242 Mr. Langford.
243 COMMISSIONER LANGFORD: Very quickly. Thank you very much.
244 I have just a couple of very tiny matters arising out of your comments this morning and a couple of your answers to Commissioner Duncan.
245 Then I might ask you one or two questions about penalties that you spoke about.
246 I want to talk to you about the sensitivity you have for small business because a lot of your members ‑‑ over 60 percent, I understand from what Mr. McLeod said ‑‑ are small businesses, very small businesses.
247 Do you have any views on how they feel about the notion of business‑to‑business soliciting, telemarketing? Would they like to be able to put themselves on the list so they are not bothered?
248 MR. McLEOD: We haven't specifically polled our members in terms of that specific question. Certainly that is one of the things that we are effective at, and if we can be helpful in that way we are glad to do it.
249 My sense is that they would not be concerned about being on the list for that type of solicitation.
250 COMMISSIONER LANGFORD: I am going to leave it to legal counsel as to whether he would like some follow‑up on that and your offer to follow up. If they would, they will certainly tell you.
251 We don't want to put you to having to hire Decima or something, although at least you know with the surveyors they've got a right to get through.
‑‑‑ Laughter / Rires
252 COMMISSIONER LANGFORD: How big is your own office, the Advocis office?
253 MR. McLEOD: We have about 60 employees.
254 COMMISSIONER LANGFORD: Is that big enough in your mind to handle telemarketing calls during business hours to you, or would you prefer they never happened: faxes, telemarketing calls?
255 Do they tie up a lot of your time?
256 MR. McLEOD: They can. They certainly can.
257 The requirement of an organization such as ours, where it is voluntary membership and you run an organization like that on behalf of the members, is to run it as efficiently and cost‑effectively as possible.
258 So there aren't a lot of extra bodies around. If you are having to perform those types of tasks, it adds to your costs significantly.
259 COMMISSIONER LANGFORD: Interesting to know.
260 With the notion on page 5 of your comments this morning, just at the end of your comments, Ms Gelgor, I think: We also recommend, you say, that calls to related persons as defined in the Income Tax Act be allowed.
261 How necessary is it? Sometimes exemptions can really confuse things.
262 If my brother‑in‑law wants to call me to sell me insurance, he can get me. He knows where I live. He knows where I play tennis. He knows my wife because he's my brother‑in‑law.
263 Is it really necessary to have this kind of an exception in there, or can these conversations take place in just the course of normal life?
264 MS GELGOR: Well, you are absolutely right. We struggled with how we deal with referrals and that, as we indicated in our remarks today, can be a key component in growing a business for financial advisors.
265 We struggled specifically with the issue of do we want to put a recommendation that would narrow definition as to referral.
266 We looked to the Income Tax Act as a possible example of where there may be a definition in the Income Tax Act, that being the related parties.
267 What we didn't want to see is an outright ban or prohibition on making calls to individuals who may be on the Do Not Call List but are in fact made by referrals where there is a relationship already in place with another party.
268 So we tried to find a balance that would allow financial advisors to carry on their business while still respecting the privacy that consumers are asking for and look to this as a possible example.
269 That really is the crux of it, is finding the right balance but making sure that referrals are not prohibited.
270 COMMISSIONER LANGFORD: It's a tough one, though, isn't it, because what is a referral? It really opens it up to abuse.
271 Somebody happens to mention "hey, call Fred" and Fred has no interest in that at all and doesn't take it well that he is being called when he is on a Do Not Call List and would like to stay there.
272 It's a tough one to define, it seems to me, precisely how strong the referral would have to be before you would look upon it as some kind of an overriding factor.
273 I just wonder whether it wouldn't be simpler administratively that if there is a referral to be done, the existing client does it or somehow makes the introduction or suggests that one of your members sends out a package or something like that so that you err on the side of caution but still be able to reach out.
274 Can you not see the scope for abuse in this type of ‑‑ although I can see why you want it. You have been very clear. But can you see the scope for abuse in this type of an exception?
275 MR. McLEOD: For sure. You can see where that possibility exists. We have several concerns around the fact of, what we talk about being level playing field. And I think it enters into this discussion.
276 That is that if you limit in one area, you have an exemption within a group of companies, an example where there is that related situation.
277 Our members are small business people in Canada and we don't want them to be disadvantaged in terms of this. It's not so much the issue ‑‑ I could easily agree with you in the sense of your referral comment, but having it apply equitably across all parties is the important point in my line.
278 COMMISSIONER LANGFORD: If that is your real fear, surely our best move here is to not have this group of company connection, to not have the notion of organization so wide, so that Rogers Cablevision, for example, can phone me if I want them to because I'm a subscriber but their publication arm can't phone me and try to flog Macleans to me because it's a totally different company within their organization.
279 Surely that would be the better way to go than to try to sort of offset it with some special case for referrals.
280 MR. McLEOD: Yes, you may be correct in that.
281 COMMISSIONER LANGFORD: Well, thank you for that.
282 The other problem, very quickly ‑‑ and I don't want to drag this out.
283 This notion that you had that when a business is sold and there has to be an introduction of a new owner, that is not a solicitation. That wouldn't be a violation, would it?
284 If you are phoning up to say that you have sold your insurance company to me and you are saying Stuart will phone you and he will introduce himself, you are not selling anything.
285 MR. McLEOD: Our concern would be ‑‑ because that is a common occurrence in our industry, that when someone comes to retire they may sell their broker business to someone else. That person then, because they have made an investment, needs to introduce themselves to that particular clientele.
286 The concern would be that if someone were on the Do Not Call List, would they be prohibited from doing that?
287 COMMISSIONER LANGFORD: I think the Chair would like to follow up on that.
288 THE CHAIRPERSON: Just on this subject, if you don't mind, Stuart. Thank you for your indulgence.
289 Clearly Stuart, it seems to me, is onto something. What he is basically saying is the clientele consists of people who already have a business relationship with the seller of the broker business. The purchaser of the broker business is calling to say I now own this business. I am going to service your account.
290 I think Stuart's argument is that that does not fall in the definition of solicitation for money's worth, I think.
291 So the question for you and we to reflect on is whether or not in fact this is the problem that you have, I think, appropriately raised to our attention, and ask ourselves whether this would in fact be a violation because: (a) the clientele consists of a group who have already signalled some sort of willingness to transact with the seller; and (b) the contact is made only to change the identity of the servicing and not necessarily to sell another $50,000 worth of insurance.
292 MR. McLEOD: And that is our concern.
293 COMMISSIONER LANGFORD: Yes, as long as you are not selling anything new, you are just introducing. I mean, I guess I can phone anybody and introduce myself, you know, as long as I don't offer to cut their grass or, you know, sell them a water softener, and I'm finished.
294 It would have to be a kind of lonely hearts club to get into that way of life, but I suppose it would fall into an exception.
295 Very quickly on penalties. It seems to me that it's tough for you folks to have it both ways. If you want to be incorporated and have all of those advantages of income splitting and taking dividends instead of income and hiding stuff away or maybe putting the wife on the payroll as a separate little company or whatever.
296 Then, you know, for your tax planning and your protection for your liability so that if you get sued, you know you've got ‑‑ the wife is running the insurance company, she has got the house in her husband's name and, you know, all of those little benefits that small companies do quite legitimately and quite rightly to protect themselves against the horrors of law suits and the income tax collectors, then you're a corporation.
297 And I guess you leave us into a bit of a mug's game. You are saying at the very least: leave it for single corporations but, you know, it's a mug's game, isn't it?
298 I mean, we can't really say: well, okay, one shareholder, then somebody will say: what about two, my wife and I own it and someone will say three, we've got the brother‑in‑law on board and it does seem a little picky.
299 Isn't the answer for us to develop sentencing guidelines, if you want to call it that, guidelines on how we are going to ‑‑ we are going to enforce this thing and to adopt sort of a case by case on the facts basis?
300 I mean, this isn't one size fits all sentencing here, if I can use it, and maybe even the courts of the land look at the circumstances. Not everybody gets ten years for every offence that has a maximum penalty of ten years. You know, if a man steals a little loaf of bread because he is hungry, he is not up there with a bank robbery. He just doesn't get the same sentence.
301 Don't we leave that sort of thing to the organization that's making the judgment calls and rely on guidelines rather than try to parse it as to membership and size and corporate structure?
302 MS GELGOR: We certainly do highlight in our remarks this morning that there should be discretion and there should be a range looking at things like severity and number of occurrences and perhaps so we would throw into the mix, is looking at the nature of the operation.
303 So where you have not necessarily the one person or one shareholder corporation, but if you have a very small family on business, perhaps that business should not be treated the same way as you would have a national organization with thousands or hundreds of thousands of employees.
304 COMMISSIONER LANGFORD: So we leave that up to the discretion of the people examining the case, but have that as perhaps part of the guidelines in looking at how you treat a case.
305 MS GELGOR: Yes.
306 COMMISSIONER LANGFORD: Or an alleged violation.
307 Those are my questions. Thank you very much, Mr. Chair.
308 THE CHAIRMAN: Thank you, Commissioner Langford.
309 Commissioner Cram.
310 COMMISSIONER CRAM: Thank you and thank you for coming today. Ms Gelgor, I was looking at page 6 on your presentation today.
311 In the second paragraph you refer to a range of punishments of both a monetary and non monetary nature.
312 What punishment is of a non monetary nature?
313 MS GELGOR: Well, to the extent that there might be any, we would suggest that it, you know, you would look at all of the variables that we have just talked about.
314 COMMISSIONER CRAM: Do you know what else we would have into our tool kit, what would be a non monetary?
315 MS GELGOR: I don't have any examples now.
316 COMMISSIONER CRAM: Okay. The fact that we could publish names of violators, do you think that would have a salutary effect or would be really not effective?
317 MS GELGOR: I think it would be an approach that is worth looking at, certainly.
318 COMMISSIONER CRAM: Is your group self‑regulating or are you regulated by either the Securities Commission or the Provincial Insurance Regulator?
319 MS GELGOR: We are an ‑‑ in our Association, we are incorporated by an active parliament, but we are not a self‑regulatory organization.
320 COMMISSIONER CRAM: Okay. And you talked about your codes, Professional Code of Conduct and Best Practices Manual.
321 What do you presently suggest or do you, in relation to when you obtain people's names, addresses and phone numbers?
322 What do you do and I'm actually going to refer to it for you, what do you suggest to your members, how they would comply with PIPIDA and specifically Schedule 14.2, Principle 2, that when you obtain this information, you have to provide the identifying purposes of it and the purposes for which the personal information is collected shall be identified by the organization at or before the time the information is collected?
323 What that says to me is once you have somebody who has bought an insurance contract, you would be saying to them: I've got your address and your phone number and I will be phoning you to sell you more insurance and you would have to be telling that in order to comply with PIPIDA.
324 Am I correct?
325 What do you tell ‑‑ what do you tell people when you get their name and number, that what use you're putting that information to?
326 Mr. McLEOD: As you have suggested, it would be for the purposes of talking to them about their particular financial planning advice, et cetera.
And so that you must be clear about that and in terms of the introduction of those services and then, that's how we prescribe that in terms of practices, et cetera, within the norms of the industry.
327 COMMISSIONER CRAM: So, it wouldn't be a stretch for us to say in any existing business relationship exemption, that you would be required to inform people that you are keeping their number and their name for the purposes of telemarketing at the time?
328 Mr. McLEOD: It would not ‑‑ it would not be a stretch.
329 COMMISSIONER CRAM: Thank you for that.
330 I need to understand calls to related person.
331 My brother lives in Red Deer, let's say he has a broker and he, my brother, says: sure, phone my sister in Regina and even though I am on a Do Not Call List, I get a cold call from a broker in Red Deer and you are suggesting that that would be ‑‑ that would be acceptable?
332 Mr. McLEOD: Within the context of what Sarah has suggested, in terms of a definition, the answer to that would be: yes.
333 Your comment about ‑‑ in our world, that's not a cold call, that's a referral.
334 COMMISSIONER CRAM: Yes.
335 Mr. McLEOD: And a cold call would be a all to someone that, you know, let's pick this name out of the phone book and I have no idea who they are or what they do, but I'm going to phone and introduce myself to them. That's cold.
336 In the sense that you have been referred through a family member, et cetera, that's a direct referral.
337 COMMISSIONER CRAM: Okay. Thank you. That's ‑‑ oh! wait. No. Thank you. Thank you very much, Mr. Chair.
338 THE CHAIRMAN: Commissioner Duncan.
339 COMMISSIONER DUNCAN: I just have one last question as a result of something that Steward asked.
340 You mentioned that you have a staff of 60 members at your Association, 60 employees at your ‑‑
341 MS GELGOR: Yes.
342 COMMISSIONER DUNCAN: And so, they are all located in Toronto; are they?
343 Mr. McLEOD: Correct.
344 MS GELGOR: Yes.
345 COMMISSIONER DUNCAN: I am just wondering just in exploring the idea of Internal Do Not Call List and the process for matching them with the national list, if you might consider, because you have obviously many members across the country, if you might consider having provincial or even regional lists that could be managed from your office in Toronto.
346 I'm assuming ‑‑ and correct me if I'm wrong ‑‑ that the 60 employees that you have do not do telemarketing, that they support the members. Is that the idea or do you do telemarketing from Toronto?
347 Mr. McLEOD: In terms of our membership renewals, et cetera, within the Association, but not, no.
348 COMMISSIONER DUNCAN: Not the customers for finance purposes.
349 Mr. McLEOD: Correct. That's correct.
350 COMMISSIONER DUNCAN: So, what would you, or would you consider ‑‑ I mean I'm just asking the question now so you maybe have another chance to think about it ‑‑ but it just seems to me that you have a large staff ‑‑ well, large, you have a number anyway and whether it would be possible to support those Do Not Call Lists from a central point so that each of your individual members don't have to incur the expense or take the time managing it.
351 It may not involve too many employees to do such a thing, given the ‑‑
352 Mr. McLEOD: The concerns that I would see in that are several.
353 Number 1, I can assure you that 60 employees to service 12,000 members is not a big staff and so we don't have a lot of additional capability within that.
354 As I mentioned to one of your colleagues a little earlier on, it is the responsibility of, say, (inaudible) too because it's a long term membership type organization to take the utmost care in terms of keeping the costs in line in that regard.
355 So, it would involve us increasing our costs and thereby our fees to the members to do that and that may be an appropriate result.
356 However, I think that the other issue is that although we have 12,000 members in that sense in terms of the financial services industry, having us do it when there are ‑‑ when there are more than 12,000 people who are out there because it's a voluntary organization, doesn't really solve the problem of catching everybody in that net.
357 COMMISSIONER DUNCAN: I'm just ‑‑ I guess first of all, on your point about costs and you've probably touched on it anyway because, you know, your members may consider that it's cost effective way to do it.
358 Mr. McLEOD: They may, I agree.
359 COMMISSIONER DUNCAN: You know. And administratively, they might be happy to have the burden taken off their hands, so ‑‑ Anyway, it's just food for thought.
360 MS GELGOR: I would just add, it could turn out to be a bit of an administrative headache for us.
361 While we do have 12,000 members, there are new members coming into the industry or coming into the Association certainly and our members do retire from time to time as well.
362 So, managing which lists we have in place and whether or not it's still in effect and making sure on the part of the Association that it's up to date would certainly be adding layers of compliance for the Association that are not in place today.
363 COMMISSIONER DUNCAN: Right. I just thought it might be a way to facilitate your members, but anyway it's something to think about.
364 Thank you very much both of you, thanks.
365 THE CHAIRMAN: Mr. Langford.
366 COMMISSIONER LANGFORD: Sorry for dragging this out, but something finally occurred to me just hearing this last exchange.
367 Do you sell your membership list?
368 MS GELGOR: No.
369 Mr. McLEOD: No.
370 COMMISSIONER LANGFORD: Never. Do you get consent from your members to try and negotiate deals with hotel chains, CAA, that kind of thing and then, in that way make them subject to kind of business offerings of some sort?
371 Mr. McLEOD: We do have supplementary services for our members on the basis of if they are a member of the Association, that they might qualify for a discount in such a situation.
372 COMMISSIONER LANGFORD: How do they become informed of these deals? Through you or through ‑‑
373 Mr. McLEOD: Simply part of their annual membership package as a member here of the following benefits.
374 COMMISSIONER LANGFORD: Right. And then, it's up to them to exercise their rights?
375 Mr. McLEOD: Correct.
376 COMMISSIONER LANGFORD: Thank you very much. That's my question.
377 THE CHAIRMAN: Thank you very much for your presence here. I am not sure if we want to pursue further, counsel.
378 MR. MILLINGTON: Merci, monsieur le président.
379 My first question is I want a clarification from Commissioner Langford.
380 Were you leaving it up to me to determine whether we want to follow up on that question with respect to their membership and the business to business telemarketing?
381 COMMISSIONER LANGFORD: Yes, please. I think you folks, having prepared the briefings and anticipating what may be necessary and what holds need to be filled, I would rather leave it to you now you see the way this thing works out.
382 But I would rather leave it to you as to whether you want to follow up on an offer which would require an undertaking of some sort.
383 MR. MILLINGTON: Yes. I think it would be ‑‑ yes.
384 I think there would be an ‑‑ given the demographics of your organization, Mr. McLeod, given the fact that they're on the small end of corporations, it would be interesting to hear from your membership with respect to whatever inconvenience they may determine telemarketing from other business would constitute.
385 So, if you could undertake to pull your members and find out what their views would be on that. In fact, you can include in that your own views as an organization, with respect to being telemarketed from by other organizations.
386 The second question I have is also for you, Mr. McLeod. You mentioned in your remarks this morning that Advocis has many years of experience in the complaint resolution process through the Chartered Life Underwriters processes and I am wondering if there is anything in those processes that you believe would be of assistance to the Commission in elaborating its own guidelines with respect to complaint resolution?
387 Mr. McLEOD: As we mentioned, because we are not an S.R.O., our role in terms of complaint and the resolution of any complaint against the member is a sanction in terms of membership and/or reporting to a regulatory body, which we might do in the appropriate, in the appropriate circumstance.
388 And both of those are significant issues for any licensed member of our organization and that works very well and effectively and has for many years in that regard since in all provinces members of our Association must be licensed to be able to transact business.
389 So, our mechanism is effective and I would suggest to you is a model that is worth looking at in that sense.
390 MR. MILLINGTON: So, this is a publicly available set of guidelines that we could consult then?
391 Mr. McLEOD: Yes.
392 MR. MILLINGTON: Okay. And, for example, you mentioned also that the size of an organization should be considered by us in terms of one of the criterian to look at with respect to our own complaint resolution process.
393 Is that a criterian that you use in your own complaint resolution process, how big the operator is?
394 Mr. McLEOD: Our members are all individual members, so we don't look at that in terms of our organization.
395 MR. MILLINGTON: Would you undertake to send me those ‑‑ that process that you use, so that we could take a look at it?
396 Mr. McLEOD: We'll send you information on that, for sure.
397 MR. MILLINGTON: Yes.
398 THE CHAIRMAN: There was one other undertaking. You've got it Shawn? Mr. Kelly?
399 MR. KELLY: Yes, Mr. President.
400 THE CHAIRMAN: Thank you. Thank you very much.
401 Madame la Secrétaire?
402 THE SECRETARY: Mr. Chairman, CADRI and AFP informed me this morning that they have mutually agreed to change the time of their presentation.
403 Par conséquent, j'appellerais maintenant monsieur Louis Guay de CADRI et son équipe.
404 Monsieur Guay, je vous demanderais maintenant de nous présenter votre groupe, après quoi vous aurez dix minutes pour votre présentation. Merci.
PRESENTATION / PRÉSENTATION
405 MR. GUAY: Mr. Chairman, Commissioners and Commission staff, good morning. My name is Louis Guay. I am both a member of the CADRI Operations Committee and manager Legal and Regulatory Affairs for TD Meloche Monnex.
406 With me today are my colleagues, Lucie Sanscartier, at the far left. Also from TD Meloche Monnex, Denis Guertin here at my left, from Belair Direct who is the CADRI's Incoming President and to my right, Laura Gunn, advisor for CADRI.
407 CADRI is a Canadian Association of direct response insurers. We appreciate the opportunity to present our views today on the establishment of the Do Not Call List.
408 We should state at the outset that we understand the need in principle for a national Do Not Call List. It is clear that the public broadly supports this idea. Our concerns are focused on how such a system will be implemented and what operational impact this will have on our industry.
409 CADRI represents a particular kind of insurance company. Our members are mostly active on auto, on the auto insurance market and home insurance market.
410 We have a particular way of distributing to consumers, we sell direct, meaning that we sell without intermediaries or middle men. Consumers contact us through call centres and web sites, often in response to a direct mail campaign.
411 Sometimes we contact consumers through telemarketing and other methods to offer competitive quotes on insurance products.
412 I emphasize our business model because the insurance market place is complex today with many products and ways of selling them.
413 CADRI represents a simple low cost f distribution. Our members are respected financial institutions subject to regulatory oversight on all of our activities by Federal and Provincial government agencies.
414 We offer consumers value, convenience, accessibility and speed and we do that by relying on technology and efficient business processes, including telemarketing.
415 We account our members account for approximately 20 per cent of the auto insurance market and 10 per cent of the home‑owners insurance sold in Canada today.
416 We are also as individual companies member of the Canadian Marketing Association. We abide by the CMA's rule on telemarketing which are mandatory for our members.
417 In our written submission CADRI comments here on a number of issues under consideration in this proceeding, but today we would like to focus on one issue that is critical to our ability to continue delivering superior value to insurance consumers. That is follow‑up phone calls to consumers who have requested insurance quotations.
418 It is common practice for home and auto insurers to collect expiry dates, meaning the dates when a potential customer current insurance policy will expire.
419 As you may know already, auto insurance and home insurance policies are one‑year contracts.
420 This practice allows us to time our follow‑up contact precisely so that our approach will come when it is the most useful to consumers, just when they are thinking about renewing their policies and hopefully they are shopping around and doing some price and value comparisons.
421 This is a service to consumers that also enhances competition in the marketplace because it gives consumers more information before they make their decision about the insurance protection that best suits their needs.
422 When our follow‑up calls are made, we remind customers that they have expressed interest in receiving a quotation. They always have the option of discontinuing the conversation if they wish and we will respect that.
423 Most importantly this type of follow‑up call is one that the consumer has already consented to in providing the expiry date. Therefore, our view is that this is not an unsolicited call.
424 The Commission has defined telemarketing as the use of telecommunication facilities to make unsolicited calls for the purpose of solicitation and goes on to give further nuance to the concept of solicitation.
425 Solicited calls are not telemarketing as defined above, in our opinion. They should be allowed, regardless of whether a person has registered for the Do Not Call List.
426 some might say that this situation is already covered under the exemption for existing business relationships. That is defined to include those who have requested information from a company within the last six months.
427 However, the collection of expiry dates takes place all year long. A follow‑up call might not take place within the six‑month window. It might take longer because it is linked to a specific event: the consumer's expiry date expiry of his policy.
428 You might ask: Why should we call someone if they have registered for the Do Not Call List? Isn't that self‑defeating from a sales perspective?
429 Well, there is a difference in our opinion between wanting protection from dinner time phone calls from the whole universe of people selling things or asking for donations over the phone and a specific product that you are interested in.
430 It isn't difficult to imagine someone registering for the Do Not Call List and not remembering that they have also asked specifically for an insurance quote.
431 So generally a Do Not Call registration should not cancel out a specific request for information.
432 From an operational standpoint, we should not have to incur the cost and time involved in vetting our expiry date calling lists against a Do Not Call List. As we have stated, our expiry date lists are comprised of people who have already given consent to be called. So they are not unsolicited calls.
433 It should also be noted that the legislation providing for the Do Not Call Lists complement existing federal and provincial privacy legislations, as well as insurance legislations.
434 Our phone calls geared to expiry dates comply with all applicable privacy and insurance legislations. These are the issues that we hope you will consider in developing the interpretative rules for the Do Not Call List regime.
435 The system ultimately adopted should allow calls to provide specifically requested information to continue regardless of the date of the request. Therefore, we recommend that the Commission adopt interpretative guidelines to provide greater clarity on that issue.
436 Thank you for allowing us to share CADRI's comments about the implementation of the Do Not Call List. We would be happy to take your questions.
437 THE CHAIRPERSON: Thank you.
438 Commissioner Langford.
439 COMMISSIONER LANGFORD: Thank you very much.
440 Your source of interest is clear, but I actually do have a couple of questions about it.
441 I have read your written submission, I heard you this morning and there is a couple of things about the mechanics of what you are doing that I just don't get.
442 You refer on page 3 to potential clients, potential customers.
443 Are you saying that you are somehow collecting the expiry dates of insurers who are not now customers of yours?
444 MR. GUAY: That is correct, sir.
445 COMMISSIONER LANGFORD: How do you get those?
446 MR. GUAY: We get that through a variety of means. We get it through the internet. Typically what we do is we send our clients information about insurance products ‑‑ potential clients, that is.
447 We often get ‑‑ in the case of our company, TD Meloche Monnex, we are a major group insurer. So we get information about potential clients from the groups with whom we have affinity agreements.
448 We send information to these potential clients and we invite them ‑‑ one of the things that we do in this publicity is we invite those potential clients to let us know if they are interested in getting a quote, a quotation.
449 One way we do that, one of the things we are offering is to these potential clients to give us their expiry dates. So they can go on the internet, log on one of our internet sites and just fill in the information that we need.
450 They can send us, they can write down ‑‑ we typically include sometimes a coupon and they can fill it out and send it back.
451 COMMISSIONER LANGFORD: Can I break this down? I don't want to interrupt but it is getting too much for me.
452 MR. GUAY: I'm sorry about that.
453 COMMISSIONER LANGFORD: Some of these expiry dates and the names that go with them, you just find yourself. You have tools of getting on the internet, of digging into this kind of information and finding out, for example, that my insurance expires August 31st or something, and then you would contact me.
454 Is that how it works?
455 MR. GUERTIN: No. If I may try to answer your question, I think what we do is we have several ways to propose to you, if you are a member of an association that we have an agreement with. It could be through a welcome package.
456 I will give you an example.
457 I am for Belair Direct and we have groups with policemen. So when they have new policemen, they have packages and in those packages they say there is benefit for you. If you want to have a quote from Belair Insurance, you send them this coupon with the expiry date and information. And then we follow up.
458 COMMISSIONER LANGFORD: And you would categorize that as you do on page 4 as not unsolicited because you have a request.
459 MR. GUERTIN: Yes.
460 COMMISSIONER LANGFORD: You have a request saying please call me.
461 MR. GUERTIN: Yes.
462 COMMISSIONER LANGFORD: Okay. I'm with you. Give me another example.
463 MR. GUERTIN: This is an explicit consent from the consumer for us to follow up.
464 COMMISSIONER LANGFORD: Right.
465 MR. GUERTIN: Our concern, of course, is often the expiry date is beyond the six‑month window. And this is where we want to be reassured that if you as a consumer ask us to follow up on an expiry date and your expiry date is in ten months from now, that we would not be prevented from doing so.
466 COMMISSIONER LANGFORD: Well, we are a little late in the day for changing the legislation right now.
467 MR. GUERTIN: Yes.
468 COMMISSIONER LANGFORD: So isn't your approach to find a way to work with that, to make one call within the six months and invite consent to make a second or to follow up with a package and ask them to mail something back if they want a quotation?
469 We are not Parliament here. We are the Commission. If the six months is laid down, isn't really the answer for you to work around that problem to adjust your ways of doing business?
470 THE CHAIRPERSON: Could I make a suggestion to see whether we are on the same wavelength?
471 COMMISSIONER LANGFORD: Absolutely. Go ahead.
472 THE CHAIRPERSON: If the six‑month requirement appears to me to apply to a case where the contact has not been explicitly about get in touch with me about something; it has rather been I happen to know when the new lawn mower model comes out, let me know or whatever.
473 But in this case it seems to me the issue would be how we would define a defence for the greater than six‑month contact in the light of an explicit request for information?
474 Would that possibly be a defence?
475 I put that up for what it may be worth.
476 COMMISSIONER LANGFORD: Well, I was hoping to save them from needing a defence. But you are right, that's the way to look at it.
477 If we want to go to the point where someone says sorry, nice try but you are in violation, I suppose you could ‑‑ I suggest actually you read the Bell Telephone brief. Boy, they've got a list of defences in there that's longer than the New Testament.
478 I take Chairman French's point of view, and I think if you want to follow that up, it's your treat.
479 But to me, I don't understand precisely the techniques that you are using. It seems sometimes you fish and find these expiry dates. At other times you actually get a written consent, but in that sense you are only worried about the time.
480 Really, that's my question. I simply don't understand how you do business that you would be worried when it comes to violating the Do Not Call List, or what it appears to say.
481 Are you basically trying to say that if I find ‑‑ I understand your card example that you send out to the Police Association; no problem.
482 But are you saying to us that if you can find an expiry date by some other means, on the internet or somewhere, that would be in your mind not a telemarketing call?
483 MR. GUERTIN: With all due respect, I don't think we are saying we are fishing for expiry dates without having the consumer giving it to us in a clear and valid consent.
484 I don't think this is what we are trying to say here.
485 We are saying once the client has requested from us very explicitly, here's my expiry date and I would like you to contact me maybe a month before because this is the time I am ready to listen, not six months before. That is what we are trying to suggest, not that we are fishing for expiry dates without the client knowing. That's not at all what we do in our business model.
486 COMMISSIONER LANGFORD: I misunderstood you, then.
487 MR. GUERTIN: Okay.
488 COMMISSIONER LANGFORD: My suggestion ‑‑ and I am certainly not going to give anybody any free business advice. That's exactly what it would be worth.
489 But it would seem to me that rather than to try and strain the terms of the legislation we have and to find ways to find subtle exceptions, it would seem to me the easier route for people who have worries is to reconstruct, restructure your business paradigm so that you come within the six months and you cover it.
490 You have come up with clever ways of getting hold of members and association members and whatnot through packages. It seems to me now it is just a matter of timing.
491 But that is a gratuitous piece of advice and is worth precisely what you paid for it.
492 Those are my questions, Mr. Chair.
493 THE CHAIRPERSON: Commissioner Duncan.
494 COMMISSIONER DUNCAN: Good morning.
495 MR. GUAY: Good morning.
496 COMMISSIONER DUNCAN: I am just going to go over some of the same questions that I asked the earlier presenters so that we can get some of your answers to those questions on the record.
497 With respect to the overriding Do Not Call List rule, in paragraph 22 of its submission The Companies proposed that the key Do Not Call List rule should read as follows:
"No person or organization shall initiate a telemarketing call to a person or organization who is validly listed in the National Do Not Call database unless the person or organization from whom the telemarketing call originates is exempt pursuant to section 41.7(1) of the amended Telecommunications Act."
498 Do you have any comments on that proposed wording? Are you satisfied with it or want to make any suggestions?
499 MS SANSCARTIER: I don't think we have any problem with the definition as it stands. I think our issue is with the term "telemarketing". The types of calls that we have described we submit don't belong within the ambit of telemarketing, because they are not unsolicited calls.
500 COMMISSIONER DUNCAN: We have noted your comments on that. That's fine.
501 MS SANSCARTIER: But with the definition, we have no problem with that.
502 COMMISSIONER DUNCAN: All right, that's great.
503 With respect to the application of the Do Not Call List rules to faxes, do you believe the Do Not Call List rules should apply to unsolicited faxes?
504 Are you aware of any technical, financial or administrative issues with applying those rules to unsolicited faxes?
505 MR. GUAY: If you allow me, our members do not use that type of solicitation. So we have no comments on this one.
506 COMMISSIONER DUNCAN: In case that practice were to ever change, what would you say to it in that case? Or you would reserve comment until then, I guess?
507 MR. GUAY: Yes, reserves our comments; thank you.
508 COMMISSIONER DUNCAN: I am reluctant to go by "never". Thank you.
509 With regard to access to the list by small telemarketers ‑‑ and I wouldn't consider your company small.
510 These people are all employees of either of your companies.
511 With regard to access to the list by small telemarketers, do you think that the smaller operators warrant a different regime to ensure their viability; and if so, how would you define that regime, perhaps in terms of technology or fees?
512 Should the operators be classified by certain quantifiable data such as gross income and given different alternative ways for accessing the database, for example?
513 MR. GUAY: Like you said yourself, we represent fairly large companies, national companies, and we do understand that perhaps some smaller operators will need some flexibility.
514 COMMISSIONER DUNCAN: So you wouldn't be opposed to a multi‑tier fee system ‑‑
515 MR. GUAY: No.
516 COMMISSIONER DUNCAN: ‑‑ that takes into consideration that.
517 That's great.
518 I just want to talk about the CMA's comment at paragraph 77 of their submission: that the Commission should adopt a regulation that would clarify that telemarketers may contact a consumer by telephone even if he or she is on the Do Not Call List if the marketer has received the consumer's consent to do so, which is along the lines of what you are talking about.
519 We just want to know what you consider would be appropriate documentation of that consent that would satisfy or stand up if there was to be an investigation.
520 MR. GUAY: First of all, to answer your question more specifically, yes, we support that comment, that statement. It is logic from our perspective.
521 From a privacy perspective and what type of consent we should be expecting, as you may know, there is a patchwork of privacy legislation in Canada. Quebec has its own, Alberta, B.C. and there is PEPITA.
522 The privacy requirements are slightly different with respect to consent. So to give you an honest answer, PEPITA allows for an implicit consent, an implied consent.
523 I think every type of consent that is legal from a privacy perspective in the relevant province or region should be considered.
524 I know that even in our industry, the different players have adopted different strategies to get their clients' consent.
525 For example, in our case, we have what we call an underwriting consent. So when a client calls in, we have a verbal script that our representative reads to the client to get their consent. Not all companies do that.
526 We have follow‑up documentation that informs customers about what we do with their information and the purposes for which we collect and use the information.
527 I think in all honesty it is difficult to answer your question, because it may vary. But I think any legal way of collecting or getting a consent should be considered.
528 COMMISSIONER DUNCAN: Your comments are very helpful in developing what the guidelines should be, the compliance continuum. I think that is very helpful.
529 MR. GUAY: Thank you.
530 COMMISSIONER DUNCAN: With respect to internal Do Not Call Lists, in your submission you indicate that it shouldn't be necessary for organizations to maintain internal lists and thinking that it might cause ‑‑ this is CADRI's, actually both of you, I gather, in your suggestions indicated that you didn't feel it was necessary to maintain internal lists.
531 But in CADRI's case specifically, you indicated it may cause confusion and add costs.
532 I am just wondering if you have considered a consumer who does not want to register on the national list but does not want to receive calls from a specific company, a requirement to maintain internal lists in conjunction with the national list would give those consumers added flexibility and would mean that they could still be contacted by the telemarketers.
533 MR. GUAY: It's a very good point, Ms Duncan.
534 It's funny because since we have done our presentation, we have had further discussions and have reconsidered that point.
535 I think our position at this point would be that there is a need, there is a logic for keeping our own lists.
536 So I will let my colleague complete the answer on that.
537 MR. GUERTIN: Maybe the original submission we made was more based on our concern on how to manage all those lists, because for those who have experience in managing client lists and databases, the more match you try to do, the more complex it becomes. You could have your own internal Do Not Call, "do not mail", "do not e‑mail".
538 COMMISSIONER DUNCAN: Yes.
539 MR. GUERTIN: I think our concern was more the intent is right from a concern point of view, and we all agree. This is why we have kind of revisited our comments that we made in the original presentation.
540 We agree that I could maybe as a consumer, maybe I don't want my name to be on the Do Not Call List on a national basis, but I don't want your company to call me. So for that purpose we agree.
541 We were more concerned about the operational challenge that it will bring.
542 So we do support the intent of having a company list, if you want. We are just going to have to find a way to make it operationally viable.
543 COMMISSIONER DUNCAN: That's encouraging that you do think that obviously it could be managed.
544 MR. GUERTIN: Yes. We understand the need. And even for our own business it is not a good thing to contact someone who doesn't want you to.
545 COMMISSIONER DUNCAN: That's true. It's like shooting yourself in the foot.
546 MR. GUERTIN: Yes, exactly.
547 COMMISSIONER DUNCAN: With respect to the CMA's recommendation that the Commission allow companies to make digitally pre‑recorded voice calls through Automatic Dialling and Answering Devices, ADADs, for business‑to‑business telemarketing, for telemarketing to consumers with whom an existing business relationship exists, and for customers who have provided consent ‑‑
548 First of all, maybe I should ask if ADADs would be useful in your business. If they were allowed, would you contemplate using them?
549 MR. GUERTIN: A quick survey was made of our members, and we do not use this and our members do not intend to use this. So whether it is forbidden or not, that wouldn't seem to have an impact on what we intend to do.
550 COMMISSIONER DUNCAN: Those are helpful comments. Thank you.
551 I would also like to ask the question that I asked about Contact New Brunswick's concern with respect to cost. Theirs is particular in regards to smaller companies setting up the necessary equipment and hardware and software to be compliant with the new Do Not Call List system.
552 I am wondering if you have any view or estimate on what the cost might be.
553 I know that you are looking at a larger company and the economics are completely different, but do you have an opinion on that?
554 MR. GUERTIN: I am not sure that I have an opinion as much as an impression.
555 COMMISSIONER DUNCAN: That's helpful.
556 MR. GUERTIN: It seems to me, from our own experience, that whether you are trying to match a million names or 10,000 names, the infrastructure and the process is probably close to the same in terms of the impact on costs.
557 It is a complex thing to match databases. I really want to stress this. Whether what you are doing is trying to match a small list or a big list, there is a process to implement within your own organization. For that process to reach, let's say, 95 percent accuracy, this is where the investment is, in my mind, more than the cost of the computer of doing that.
558 COMMISSIONER DUNCAN: Considering the evolution of telemarketing in the U.S., and what will happen here in Canada, do you think that at some point it would be reasonable to expect that there would be off‑the‑shelf software available?
559 Is that possible?
560 MR. GUERTIN: I must admit that I have never thought about this.
561 COMMISSIONER DUNCAN: You would have another line of business and you could sell what you ‑‑
562 MR. GUERTIN: Yes.
563 Yes, that could be.
564 COMMISSIONER DUNCAN: It could be possible.
565 MR. GUERTIN: Because if whatever the rules will be create the need, I am sure there will be people thinking about it.
566 COMMISSIONER DUNCAN: Thank you.
567 This might be something that would be more relevant to larger companies. It would definitely be, because they might want to engage a third party provider, for example, another call centre, ad agency or call broker, to access the list on their behalf.
568 We are wondering, first of all, if that should be allowed. Do you think that we should allow third parties to access the list?
569 And how should such access be granted and controlled?
570 Also, of course, there is an element of who should pay in there; and if they should be required to identify on whose behalf they are accessing the list.
571 MS SANSCARTIER: I'm sorry, I might have missed some of the elements of your question.
572 With respect to third party users, our members don't have any problem in principle with allowing them access.
573 I think, from our perspective, a lot of the questions you raise will be worked out in private contracts between the outsourced party and the institution.
574 So compliance and all of that for us is something that, if the member company has an expectation, it is that their provider will comply with every rule there is because they are representing them.
575 COMMISSIONER DUNCAN: So you think that it could be managed through an outsourcing arrangement or a contract.
576 MS SANSCARTIER: Yes.
577 COMMISSIONER DUNCAN: Thank you.
578 The last question that I have is on the rate structure ‑‑ the potential rate structure for the system.
579 The companies have suggested that the fees for making use of the national Do Not Call List could be applied annually, quarterly, monthly, or at the time the system is accessed. That really has a cash flow implication, but, at any rate, there are many options for doing that.
580 The companies suggest that fees could be charged on a per access basis, which I think they indicate is probably the most equitable.
581 In the U.S., the fees are charged based on the area codes for which information is retrieved, with the first five being provided at no charge.
582 In the U.K., the fee structure is based on the type of licence ‑‑ and I think there are three or four types of licences ‑‑ and the quantity of area codes that an entity wishes to access.
583 What type of rate structure do you think would best serve Canadian organizations, and is there a particular structure that would be better suited to small organizations?
584 MR. GUERTIN: I don't think we have spent much time reflecting on what should be the preferred rate structure. I think our comment would be more like: Let's make sure it is a level playing field for the small as well as the big players.
585 I don't think the big players should pay more because they are big. As well, I don't think the small players should have a disadvantage in accessing this, because it is now mandatory.
586 I think that a per access basis seems to be an interesting scenario. I am not personally familiar enough with the U.K. system to further comment.
587 COMMISSIONER DUNCAN: Do you think, from a technical point of view ‑‑ because, obviously, you are familiar with the software implications in developing a system like that ‑‑ do you anticipate that that would be insurmountable?
588 It sounds like a reasonable application to charge on a per access basis.
589 MR. GUERTIN: Yes, I think so.
590 We have other instances in our industry where we have to access third party databases, and we have a different structure of fees, depending on what database, and on a per access basis doesn't seem ‑‑
591 COMMISSIONER DUNCAN: All right. Thank you very much.
592 Those are my questions, Mr. Chairman.
593 THE CHAIRPERSON: Commissioner Cram.
594 COMMISSIONER CRAM: Thank you.
595 I wanted to go back to your six‑month concern.
596 Is it your position that, even if you get the explicit consent of the individual, if that consent says "within the next 12 months", we would see that as a violation?
597 MR. GUERTIN: Yes, that is the concern that we wanted to raise this morning, that if we have consent from a potential client, because there is no product relationship at the moment, and if we were to follow up beyond the six‑month period, it would be considered a violation.
598 COMMISSIONER CRAM: All right. Here is the fact scenario.
599 I am on the Do Not Call List, but I want Belair Direct to give me a quote, and I see your coupon, and I have to send you something back ‑‑ in paper always?
600 Is that ‑‑
601 MR. GUERTIN: On paper, or it could be, also, on the phone.
602 In our case, we have digital recordings of all the calls, so in terms of traces, we have different ‑‑
603 COMMISSIONER CRAM: One or the other.
604 MR. GUERTIN: Yes.
605 COMMISSIONER CRAM: Or the Internet.
606 MR. GUERTIN: Or the website.
607 COMMISSIONER CRAM: Yes.
608 And I say, "I want you to call me anytime during the next 12 months," and I give you my explicit consent to phone me within the next 12 months ‑‑
609 MR. GUERTIN: Yes.
610 COMMISSIONER CRAM: You are saying, even in that circumstance, you think that if you phone in the seventh month, that would be a violation of the Do Not Call List?
611 MR. GUERTIN: We wanted to be reassured that it would not be.
‑‑‑ Laughter / Rires
612 COMMISSIONER CRAM: The next thing I want to know is, what do you say to people when you get their name and address of what use you are going to put to that information?
613 Under PIPEDA, what do you tell them what you are going to use it for?
614 MR. GUAY: Do you mean in the context of getting the expiry date, or generally speaking?
615 COMMISSIONER CRAM: Getting their information, the phone number and their name.
616 MR. GUAY: In relation to ‑‑
617 COMMISSIONER CRAM: PIPEDA says that you have to tell them the purpose of the use of that information. What do you tell them?
618 MR. GUAY: Generally speaking, like I said to Commissioner Duncan, our members have different approaches to getting consent and telling ‑‑ you know, they have different strategies in terms of privacy, depending, also, on where they operate.
619 But, in general, most of our members, I think, have implemented an underwriting consent. So when somebody is calling, we tell them that we will be collecting their information and using it for the specific purpose of offering insurance.
621 Every time we are in contact with our customers, especially at ‑‑ one of the strong moments, if you want, in the insurance relationship, is when there is a claim. So, obviously, when someone is reporting a claim, it is another time when we try to get specific consent.
622 It depends on the moment of the relationship, but what we basically do is, every time we have a chance, we tell our customers what we will do with the information, and the purposes are usually all the same from one company to another. It is assessing their profile. It is collecting the information and using the information that we have collected from them.
623 Sometimes, also, we ask them to give us the consent to verify or collect information from third parties to complete the profile.
624 It is basically around those purposes.
625 COMMISSIONER CRAM: So given the different jurisdictions and requirements, it would probably be better to have a federal requirement that would apply across the country.
626 Would it be a big stretch for you to inform these people that their name and telephone number will be used for telemarketing purposes even if they are on the Do Not Call List?
627 That wouldn't be a problem, would it?
628 MR. GUAY: No, I don't think so. I can't think of anything ‑‑
629 COMMISSIONER CRAM: Thank you.
630 Thank you, Mr. Chair.
631 THE CHAIRPERSON: Thank you, Commissioner Cram.
633 MR. MILLINGTON: I would like to return to the question of consent.
634 As I understand the processes that your members use, there are a number of different ways by which they get consent.
635 Would it be particularly onerous for your members to always maintain some form of written evidence of the consent obtained and the nature and scope of that consent?
636 MR. GUAY: In the context of the expiry date, not really, because we actually get the information. It is the customer that is sending the information, so written ‑‑
637 I want to clarify the term "written", because in our world we use technology a lot, and we use the Internet. So written ‑‑ I don't know what written means any more.
638 I think any document that you can print, that is virtual but you can print, could qualify, but it is not because you haven't printed it that it's not written yet anyway.
639 As for the general consent that we get, I have to say that in our industry, generally speaking ‑‑ and not only the companies doing business directly with the public, but also the companies who are distributing their products to brokers ‑‑ most of the companies rely on implied consent, and there is not always ‑‑ you cannot find a piece of paper on which the customer has signed a consent form or anything like that. The business is done over the phone, mostly.
640 MR. MILLINGTON: I am just going to the comment that you made in your submission this morning, where you identified it as a critical issue, the ability to make these follow‑up phone calls.
641 MR. GUAY: Yes.
642 MR. MILLINGTON: If it is that critical to your business, then surely you could take a step across your membership, such that the record‑keeping of that consent was sufficient for at least a couple of purposes.
643 I am not giving you advice here, I am just raising it as a theory.
644 For example, there is under the Act, as it is currently drafted, common law defences, and if there is consent and you can evidence the consent, that might be something that your legal advisors could advise you on, as to whether that might constitute a sufficient defence in that context.
645 There is also another possibility that you might seek some advice on ‑‑ and I am wondering whether you have ‑‑ which is, under 41.7(2)(a) ‑‑ it is the (b) subsection that refers to the six‑month period that you are concerned about.
646 The preceding subsection, sub (a), talks about an 18‑month window, which would address your 12‑month period.
647 Have you ever considered structuring your provision of the quotes as a type of service, which, possibly, would make that subsection available to you?
648 Have you looked into that at all?
649 MR. GUAY: Not yet. We haven't looked into that.
650 MR. GUERTIN: I think the hesitation that we had in trying to answer your question was more to do with when you used the words "written consent", as opposed to "legally valid consent".
651 Right now, as I said, there could be a consent given to us on our website. Could we say that is written?
652 We identified the person who was coming to our website, and they provided us with their expiry date.
653 It could be done over the phone. As I said, in our case we use digital recordings, and most provinces have adopted legislation that allows that as being legally valid.
654 So legal evidence of that, I think ‑‑ we could survey our members, but my feeling is that they would agree with that.
655 The format, I think, is where we ‑‑ we would probably suggest that it has to be a legally valid format, but written, in today's world, is not the only legally valid format.
656 MR. MILLINGTON: The question would be, then, is it so onerous for organizations that make up your membership to comply with the legal evidentiary requirements of obtaining some form, whether it is electronic or written or otherwise, but something that would be legally satisfactory to constitute evidence of a consent, and therefore have that available to you under the Act.
657 MR. GUERTIN: Yes.
658 MR. MILLINGTON: As I say, the alternative is to take a look at 47.2(a) to see what you could do with that in order never to run amuck of the subsection in the first place.
659 MR. GUERTIN: It seems to us, I think, reasonable, feasible and legally sound.
660 Of course, in our association, we like to come back to our members and ask if they have any issue that we don't see ourselves. But spontaneously, answering your question, I think this is feasible and right as well.
661 LE PRÉSIDENT : Madame la Secrétaire, avez‑vous quelque chose à ajouter avant que je remercie le panel?
662 LA SECRÉTAIRE : Non.
663 LE PRÉSIDENT : Merci beaucoup de votre présence. Ça été très utile.
664 Ladies and gentlemen, we will take a break for 15 minutes. We will be back at 11:35 a.m.
‑‑‑ Upon recessing at 1110 / Suspension à 1110
‑‑‑ Upon resuming at 1135 / Reprise à 1135
665 LE PRÉSIDENT: À l'ordre, s'il vous plaît.
666 Ladies and gentlemen, if we could please take up ‑‑ take your seats.
667 Madame la Secrétaire?
668 LA SECRÉTAIRE: Oui, monsieur le président. Nous allons continuer avec Canadian Bankers Association, with Ms Linda Routledge.
669 So, could you introduce your colleagues, please.
670 THE CHAIRMAN: Just before we begin, we do want you to introduce your colleagues for sure.
You have a time constraint and I've offered you to waive your right of initial presentation in favour of our asking questions but, of course, it's your choice and your option.
671 You've told me that essentially the comments you had prepared are consistent with and representative of the written submission that you made and so, it's completely up to you after you introduce your colleague, whether you want to make a small or larger initial presentation, but obviously if you have to leave us by 12:15, it is conceivable that the longer we do the initial presentation, the less subsequent discussion and question there will be.
PRESENTATION / PRÉSENTATION
672 MS ROUTLEDGE: Okay. I am Linda Routledge, director of Consumer Affairs with the Canadian Bankers Association and with me today is Nathalie Zlatinsky who is running a call centre with the Toronto Dominion Bank, TD Bank Financial Group.
673 MS ZLATINSKY: Thank you.
674 THE CHAIRMAN: Welcome.
675 MS ROUTLEDGE: I would like to not do my entire presentation, but just touch on one thing because a number of the other presenters have been talking about this and it's the whole idea of consent and outside of being a problem in terms of being outside of the Do Not Call List.
676 And what we would like to suggest is that the concept of unsolicited calls be clarified. If an individual without an existing relationship and whose number is listed on the DNCL has given their consent for an organization to call, that consent should override the DNCL prohibition on calling.
677 If I go to a home show and I fill out a form and say: please call me about a garage door, clearly that person should be able to call me, that business should be able to call me even if my name is on the Do Not Call List.
678 So, I think if we could clarify what an unsolicited call is or is not, that that may help the situation and with that, I'll move to questions.
679 THE CHAIRMAN: Thank you very much. Commissioner Duncan.
680 COMMISSIONER DUNCAN: Good morning. I'll take you through many of the same questions as I've asked the others, but I do have some unique to the Bankers presentation.
681 First of all, with respect to the overriding DNCL rule and the definition that the companies have proposed, we are interested in whether you have any comments on the wording or whether you would support it or would like to see any changes and I'll just read it for you:
"No person or organization shall initiate a telemarketing call to a person or organization whom is validly listed in the National Do Not Call database, unless the person or organization from whom the telemarketing call originates is exempt, pursuant to Section 4171 of the Amended Telecommunications Act."
682 MS ROUTLEDGE: I would reiterate my comments just earlier. I think if the person has given consent in one way or another, whether it's ‑‑ if they have given consent, then it should override the DNCL prohibition.
683 COMMISSIONER DUNCAN: With respect to the application of the Do Not Call List rules to faxes, do you think that they should apply to unsolicited faxes? I don't know if the bank uses those or not, and if there are any technical financial or administrative issues with applying those rules to unsolicited faxes?
684 MS. ZLATINSKY: To the best of our knowledge, the banking industry does not use faxes to solicit customers for products that they offer.
685 COMMISSIONER DUNCAN: Oh! Thank you. So, you don't have an opinion?
686 MS. ZLATINSKY: No.
687 COMMISSIONER DUNCAN: Thank you.
688 In your submission ‑‑ just one second now ‑‑ in your submission, you recommend the calls between the telemarketer and any business be exempt from the application of the National Do Not Call List and the application of the National Do Not Call List be limited to calls to a residential line?
689 MS. ZLATINSKY: That's correct.
690 COMMISSIONER DUNCAN: Do you believe the current telemarketing rules are appropriate for business to business calls? Not the DNCL rules, but the other rules.
691 MS ROUTLEDGE: I'm sorry, are there specific rules that you are referring to?
692 COMMISSIONER DUNCAN: Well, the rules that are in place right now, for example, that they maintain internal Do Not Call Lists.
693 MS ROUTLEDGE: Yes, I think that is appropriate.
694 COMMISSIONER DUNCAN: If you do agree that the current telemarketing rules are appropriate, then why would you feel the requirement that these calls, business‑to‑business calls, should be excluded from the Do Not Call List rules?
695 Currently they do maintain internal Do Not Call List rules, for example, and you support the current rules.
696 Why do you think that applying the Do Not Call List rules to business‑to‑business calls is a problem?
697 MS ROUTLEDGE: From a practical perspective, I think it is difficult. There are small businesses that yes, may want to utilize the existing rules.
698 But from a practical standpoint, a lot of business is done from businesses calling other businesses, and that's just the way the business is done. It is an accepted way of doing business and most regular businesses would accept that.
699 COMMISSIONER DUNCAN: Actually you touched on my next question.
700 You have indicated that small home‑based businesses, for example, should be able to register on the list if they choose.
701 MS ROUTLEDGE: It is not a position that we have solidified with our members, so I find it difficult to give too much detail on that one.
702 COMMISSIONER DUNCAN: I guess the problem that would follow out of all of this is how the automated system would differentiate between a residential registration, a home business registration, a business of whatever size you think would be appropriate, and not allow that one to register.
703 MS ROUTLEDGE: I guess part of the difficulties with businesses is where you have a business that has an internal telephone network and how do you get into the practicalities of such and such a number, extension so‑and‑so.
704 Those are the practicalities that we just thought would be very, very difficult to implement in this type of a Do Not Call List.
705 COMMISSIONER DUNCAN: There seems to be less of an issue there today because many people have direct lines. But I guess we would have to discuss with the companies just to see what the technical implications there might be.
706 I think there is an increasing number of larger companies where you dial directly through to the person's number.
707 But that's fine; thank you.
708 With regard to the registration period, The Companies propose that the numbers should remain on the Do Not Call List for a period of three years.
709 In your submission you also recommend an automatic expiry of the registration on the Do Not Call List after three years.
710 It will cost, obviously, for the Do Not Call operator to re‑register consumers every three to five years, both in terms of staffing and other dollar costs, and will likely annoy and confuse consumers.
711 In the U.K. consumer numbers remain on the list indefinitely.
712 Assuming that disconnected numbers and re‑assigned numbers would be removed by the carriers from the Do Not Call List, why shouldn't telephone numbers remain on the Do Not Call List indefinitely or until otherwise removed?
713 MS ROUTLEDGE: The removal by the carriers would certainly address a lot of the problems that we foresaw.
714 I guess we look at the way the Canadian Marketing Association list is run now, and it seems to be very satisfactory. As far as I know, they are not getting a lot of complaints when the numbers expire after three years.
715 It gives the person an opportunity to reconsider whether things have changed at that stage of the game.
716 COMMISSIONER DUNCAN: And of course that weighs against the overall cost of operating a system, you know the Do Not Call List system, which is going to have to be borne by the participants.
717 You obviously think that it is important that people have a chance to re‑evaluate their decision.
718 MS ROUTLEDGE: We do.
719 COMMISSIONER DUNCAN: And you are not concerned that it would annoy or confuse consumers?
720 MS ROUTLEDGE: I think it is a matter of the up‑front disclosure, knowing that it lasts for three years. If you disclose it to them at the beginning, then there is a better understanding and acceptance of it.
721 COMMISSIONER DUNCAN: Thank you.
722 In paragraph 77, the CMA submitted that the Commission should adopt a regulation that would clarify that telemarketers may contact a consumer by telephone even if he or she is on the Do Not Call List if the telemarketer has received the consumer's consent to do so, which I believe is your position as well.
723 MS ROUTLEDGE: We definitely agree with that.
724 COMMISSIONER DUNCAN: I am wondering what you would consider would constitute consumer consent and how that should be documented in order to provide sufficient documentation as a defence in the case of an investigation.
725 MS ROUTLEDGE: With the banks right now, the banks get consent from consumers as required under PIPEDA and it is usually done with full disclosure on an application form or, in the case of telephone sales, in a script or whatever up‑front.
726 There is disclosure that the information will be used for providing information on our other products and services that might be of interest to them.
727 So it covers a wide range. It discloses the different types of products or businesses that are associated with the bank and indicates that, by signing, they would be giving consent to such marketing.
728 COMMISSIONER DUNCAN: Thank you.
729 I'm just trying to be mindful of your schedule.
730 In your submission at paragraph 25 you indicate that the banks will continue to maintain their own Do Not Call Lists for their existing clients as required by regulation. And you indicate that the national Do Not Call Lists should effectively deal with the preference of all non‑customers with respect to that list.
731 I take it from that that you don't think that internal Do Not Call Lists are necessary for other companies, just the bank will continue to maintain theirs because they are required to do so by regulation.
732 MS ROUTLEDGE: Yes. They maintain ‑‑ well, regulation and just good customer service. There is no point in the bank phoning someone that doesn't want to hear from them about other products and services. So it makes good sense from that perspective.
733 COMMISSIONER DUNCAN: You probably heard my comments earlier. The Registered Education Savings Plan Dealers Association made the point that it is reasonable to maintain internal lists because it gives consumers an opportunity to not register on a particular list but not exclude themselves from the whole national, the potential of getting calls across the board.
734 I just wondered, with that in light, considering that, or if you took that into consideration in making your suggestion that it is not necessary for them to ‑‑
735 MS ROUTLEDGE: I guess our comment was made in light of the fact that as far as I know ‑‑ and there could be some exceptions to this. But as far as I know, the bank's telemarketing is done to existing customers by and large. So they would have the exemption under the existing customer and non‑customers aren't generally telemarketed.
736 COMMISSIONER DUNCAN: So then you wouldn't be opposed then giving more thought to ‑‑
737 MS ROUTLEDGE: We would certainly be supportive of more thought being given to the other part of it.
738 COMMISSIONER DUNCAN: All right.
739 MS ROUTLEDGE: At the moment, we can't weigh in on it.
740 COMMISSIONER DUNCAN: Thank you.
741 In regard to calling hours, the FCC rules state that telemarketing calling hours are 8:00 a.m. to 9:00 p.m. Parties have recommended other options. The CMA, The Companies and PIAC have recommended the following hours for live voice and fax calls: weekdays, 9:00 a.m. to 9:30 p.m.; weekends, 10:00 a.m. to 6:00 p.m.; and prohibited on statutory holidays.
742 The Union des consommateurs has recommended the following hours: weekdays, 10:00 a.m. to 6:00 p.m.; weekends, 11:00 a.m. to 3:00 p.m.; and prohibited on statutory holidays.
743 In Order 96‑12‑29, the Commission established hours for the transmission of unsolicited faxes for the purpose of solicitation and restricted them to the hours between 9:00 a.m. and 9:30 p.m., Monday to Friday; and between 10:00 a.m. and 6:00 p.m. on Saturday and Sunday.
744 Should there be a time restriction rule for voice telemarketing; and if so, what do you consider to be the appropriate time restrictions?
745 And also, do you agree with the suggestion in the interests of symmetry that the hours of voice and fax telemarketing should be the same?
746 Can you think of any reason that would justify having different hours for voice and fax telemarketing?
747 MS ROUTLEDGE: I think I can give a short answer to that.
748 The banks are all members of the Canadian Marketing Association, so I think we could support the Canadian Marketing Association's proposed hours.
749 As we don't do faxes, I would rather not weigh in on that one.
750 COMMISSIONER DUNCAN: Thank you.
751 What are you views on whether third party providers such as call centres, ad agencies and call brokers should be allowed to access the system on behalf of another party in order to scrub the list?
752 Should such access be granted and controlled?
753 Should third party providers be required to identify on whose behalf they are accessing the list?
754 MS ZLATINSZKY: We have no concerns with third parties accessing the list. Within our own organization we take ownership for creating a list that we give to third parties. So we already scrub against the internal Do Not Call List. We take full accountability in‑house to make sure that they have the final list on all contactable customers.
755 COMMISSIONER DUNCAN: So you wouldn't contemplate have the third party scrub your lists. You are large enough that you will be doing it yourselves.
756 MS ZLATINSZKY: No.
757 COMMISSIONER DUNCAN: Thank you.
758 I would like to ask you the question about the rate structure.
759 The Companies have suggested that fees for using the list could be applied annually, quarterly, monthly or each time the list is used.
760 The Companies suggest the fees could be charged on a per‑access basis. As I have indicated earlier, they suggest that might be the most equitable.
761 In the U.S. the fees are charged based on the number of area codes for which information is retrieved, with the first five being provided at no charge.
762 In the U.K. the fee structure is based on the type of licence and the quantity of area codes an entity wishes to access.
763 What type of rate structure do you think would best serve Canadian organizations?
764 Is there a particular structure that would be better suited to smaller organizations?
765 MS ROUTLEDGE: We haven't considered in detail the subject of rate structure or anything like that. As far as we are concerned, whatever rate structure is put in place should be equitable, cost‑effective, and so on like that.
766 COMMISSIONER DUNCAN: Thank you very much.
767 Mr. Chairman, that concludes my questions.
768 THE CHAIRPERSON: Thank you, Commissioner Duncan.
769 Commissioner Langford.
770 COMMISSIONER LANGFORD: Thank you, Mr. Chairman. I will try to be brief.
771 I think we are doing all right by you. We will get you out the door on time.
772 MS ROUTLEDGE: Thank you very much.
773 COMMISSIONER LANGFORD: I want to talk a little bit about enforcement and your position on enforcement.
774 I have to tell you, perhaps I misunderstand it but it does leave me a little bit confused. I want to see if I can encapsulate my understanding. And if I am wrong, I hope you will correct me immediately.
775 It seems that what you are saying in your initial document filed with us, from paragraph 43 through to about 48, is that rather than get involved in some sort of consortium that might be working to kind of be an initial step in the resolution process, you would prefer to stick with the sort of resolution process you already have in place and that other ‑‑ my assumption is that other people could do exactly the same thing.
776 Is that right?
777 MS ROUTLEDGE: Yes. What we are trying to say is that when a customer of an organization has a problem with that organization, say it's a bank, they should first approach the bank and try and resolve the problem there.
778 Then if that doesn't work, then fine, there are other methods out there.
779 COMMISSIONER LANGFORD: I have looked at your careful description of your own problem solving situation. It seems to be about a four‑step process where you go through the internal process in the bank itself on two different steps. If that doesn't work, you can then go on to the ombudsman, the formalized ombudsman system, as you refer to it, for what you call impartial and independent resolution.
780 So there seems to be kind of four steps all the way.
781 As good as that may be ‑‑ and I make no critical comment on it. I have never been involved in it. I have no first‑hand knowledge.
782 So even based on the assumption that the system works and works well, if you have your own system and X, Y and Z have their own systems and the insurance people have their own system and the people who are selling subscriptions to magazines have their own system, aren't we in danger of having a different set of laws, as it were, for each different telemarketing industry, each different telemarketing segment?
783 And is that ever a good idea in law when in the end you may end up going to the final arbiter, which is either the operator or us, or some other delegate?
784 Doesn't that strike you that we would end up with two, three, four, or even 50 different systems of enforcement and that that is very unlikely to be equitable and fair across the board?
785 MS ROUTLEDGE: I think it's fair if each organization deals with its own complaints. The whole idea of this Do Not Call List and the enforcement mechanisms associated with it is meant to not punish little one‑off mistakes. I think I read that somewhere.
786 What is the material? If it's three or four or a dozen or two dozen complaints, then there is some kind of mechanism for taking some action on it.
787 Similarly, if a consumer has a small complaint and immediately the bank says gee, I'm sorry, would take you off the list and that person never has another problem with the organization, then why should it have to go through the whole regulatory process?
788 I can certainly see if there is repeated instances of problems with an organization then you would need to go through and you would want the standardized process that covers everybody.
789 I am just saying that I think individuals should have, or organizations should have the opportunity to deal with the individual ones and deal with them properly and take them right off the table first.
790 COMMISSIONER LANGFORD: Of course, there is nothing to stop both of them running parallel.
791 Can you see the danger that I am flagging for you: that here you have the banks, who have set up an elaborate four‑step two‑tier system of problem solving. Fine. And let's assume, as I say, that it works perfectly. But on the other level and for other groups, that may not exist.
792 So wouldn't it be better in a sense to be involved in some sort of consortium, a self‑policing kind of level on the first level, the first stage, to bring your expertise to that? Others would bring theirs. But at least to ensure that every telemarketing complaint had the advantage of being handled in the same way.
793 It might very well be just simply settled at the consortium level and not go any farther; as you say, a one‑off small problem.
794 On the other hand, if it did move up through the different processes, everybody would at least have the satisfaction of knowing that they were going to get the same justice. It would be justice for all and it wouldn't be one level for people with complaints at the banks and another for people with complaints with magazine subscriptions.
795 MS ROUTLEDGE: I think it would be level if each consumer had the opportunity to make an attempt to resolve it with the organization. So whether it is Lou's Paving or it is one of the larger banks, if they make that effort and it is successful, then it is looked after.
796 If it is not successful, then it goes to the process.
797 I am just saying that there should be an opportunity for an organization to deal with the person one‑on‑one for one occasion, to give them the opportunity, one opportunity, to look after it.
798 COMMISSIONER LANGFORD: If we were to reject that position ‑‑ of course, there is nothing to stop you keeping your own ombudsman and your own complaint mechanisms.
799 But if we were to reject that, speaking hypothetically, and say no, we want one system for all, would you then be more inclined to want to be part of that system rather than to say no, we don't want to be part of it, we will just wait; We will stand on the sidelines.
800 Let other people be in the consortium if they want; we are not going to be there.
801 MS ROUTLEDGE: I think there is certainly a role for all the stakeholder input, and we would want to have stakeholder input.
802 COMMISSIONER LANGFORD: Could you speak just a little louder. I'm sorry.
803 I'm getting old and crotchety.
804 MS ROUTLEDGE: I'm sorry.
805 THE CHAIRPERSON: Especially crotchety.
‑‑‑ Laughter / Rires
806 MS ROUTLEDGE: We would certainly want to be part of the stakeholder consultations on how things are done, yes.
807 As you would have seen from my speaking notes, we are not sure that the consortium process would be the most cost efficient way of going about overseeing the list operator, but certainly stakeholder feedback is important and, through an advisory committee or whatever, it would be important, and we are certainly at the table on both of the committees, and so on, looking at it.
808 COMMISSIONER LANGFORD: So if we go down that road, you want to be part of it. You still want to maintain your place and your advisory role.
809 MS ROUTLEDGE: Yes.
810 COMMISSIONER LANGFORD: Those are my questions, Mr. Chair.
811 THE CHAIRPERSON: Thank you, Commissioner Langford.
812 Commissioner Cram.
COMMISSIONER CRAM: Thank you for coming.
813 I was looking at your speaking notes and I noticed that the banks do have Do Not Call Lists right now. Are they working relatively well? Are there any problems that you are aware of?
814 MS ROUTLEDGE: I am certainly not aware of any problems. We believe that they work well. But we work with humans, so there are often mistakes.
815 COMMISSIONER CRAM: Is it a 30‑day registration?
816 Once you say that you want your name off, within 30 days it clicks in?
817 Is that the deal?
818 MS ROUTLEDGE: It meets the requirements of the existing rules.
819 COMMISSIONER CRAM: The CMA?
820 MS ROUTLEDGE: Yes, and the existing CRTC rules.
821 I would say that the name would go on the list immediately. As I said in my speaking notes, it could be that a marketing list may have gone on down the line to one of the call centres, or something, so there may be a bit of a time delay. There could be a marketing campaign already in progress that that person's name wouldn't be removed from immediately. That is why we were suggesting that 90 days would be better, because of the processes allowed in large organizations.
822 COMMISSIONER CRAM: But this is all electronic, isn't it?
823 We are not going back to the Pony Express.
824 MS ZLATINSZKY: It is electronic to a certain extent. Within our organization, once the list is created, we do not refresh it until the campaign ends, which is typically about 45 to 60 days.
825 COMMISSIONER CRAM: But there is nothing wrong with ‑‑ it would be a fairly simple operation to look at the list after 30 days, wouldn't it?
826 MS ZLATINSZKY: It could easily be done, yes.
827 COMMISSIONER CRAM: On your individual Do Not Call List, when I phone in and say, "Take me off your list," how do I know that I am off the list?
828 The next time you phone me, am I left with saying, "Why are you phoning me? I asked to be put off the list last time," or do you send them a notice?
829 What do you do?
830 MS ZLATINSZKY: I can speak on behalf of our organization. We do not send notification to the customer that verifies that they have been removed from the list.
831 We do have the mainframe, which is applicable across all of our retail branches and the call centres, where that is updated immediately at the time of the call.
832 As Linda said, there is human error. It might have been missed in one case, but we will catch it if we happen to call the customer again.
833 COMMISSIONER CRAM: So I am put in the position of not being able to prove that I asked to be put on your Do Not Call List.
834 Is that right?
835 MS ZLATINSZKY: Potentially, yes.
836 COMMISSIONER CRAM: How could that be solved?
837 MS ZLATINSZKY: It could easily be solved with some sort of electronic communication to the customer that says, "You have been removed," or a letter. But with that comes additional costs to the corporations.
838 COMMISSIONER CRAM: What about giving a registration number in the phone call?
839 Would that be less expensive?
840 MS ZLATINSZKY: You could, as long as it was an automated registration system, which means building that platform, and it would have to be consistent across all of the organizations, not just our own company.
841 That would be a unique registration number that would be consistent across TD and CIBC and ‑‑
842 COMMISSIONER CRAM: Yes.
843 MS ZLATINSZKY: It would need to be a consistent platform.
844 MS ROUTLEDGE: But that would be a significant systems cost. We are talking millions of dollars to put that kind of system in.
845 COMMISSIONER CRAM: Those systems don't exist today?
846 MS ZLATINSZKY: No, they do not.
847 COMMISSIONER CRAM: So it would be cheaper to send out a letter.
848 MS ZLATINSZKY: Potentially, absolutely.
849 COMMISSIONER CRAM: Thank you. Those are my questions.
850 THE CHAIRPERSON: Commissioner Cugini.
COMMISSIONER CUGINI: Good morning. I have one question, depending on your answer.
851 I want to have some clarification around your definition of "corporate group" in your written submission, where you say that the organization includes a corporate group and that affiliates of an entity which has an existing relationship with a customer will fall under the exemption, provided that the necessary privacy consents for marketing across the corporate group have been obtained.
852 How do you get consent across your corporate group?
853 MS ROUTLEDGE: In the initial application form, when the person signs up for the first product or service, there will be a disclosure that says, "The bank has affiliates in the following businesses," and it would list the different kinds of businesses that that particular bank has affiliates for.
854 Then it would ask for consent to market products and services of the bank and its affiliates, "as described above".
855 COMMISSIONER CUGINI: Would the customer have a choice in saying yes for Entities or Affiliates Nos. 1, 4 and 6?
856 MS ROUTLEDGE: It would depend on the bank. Some of the banks can do it affiliate‑by‑affiliate. Others, if they say that they don't want to be marketed by an affiliate, would have to delete all of them.
857 COMMISSIONER CUGINI: I don't know if you were here in the room this morning and heard Advocis' position on this very same subject, where they say that the exemption would be based on separate legal entities, with a distinct product or function within a group of companies.
858 Obviously you don't agree with that position put forward.
859 MS ROUTLEDGE: No, we don't.
860 As long as the customer understands what is being asked and has given consent, the customer should be able to do that. And this gives the customer control over how their information is going to be used.
861 COMMISSIONER CUGINI: The reverse of that, of course, is, once they have given consent to the bank, it is automatic consent for all of the other products and services.
862 You see it as consent; that the customer has consented to being contacted by all of ‑‑
863 MS ROUTLEDGE: If that is what happens, yes.
864 What I was saying, though, was that some banks can eliminate some.
865 So, in those cases, no, it's not, they can select.
866 And at any time thereafter, the person can go back and withdraw consent.
867 If six months down the line they say, "I am sick of getting all of this stuff," all they have to do is call. There should be a 1‑800 number, or whatever, in their materials. They can call that up and be removed from the list.
868 COMMISSIONER CUGINI: How long does it take to be removed?
869 MS ROUTLEDGE: I believe that most of them will mark it immediately as "do not solicit", and "do not solicit" would mean not only telemarketing, but any other kind of solicitation, as well.
870 COMMISSIONER CUGINI: Thank you very much.
871 THE CHAIRPERSON: Ms Routledge, how are we doing?
872 Do we have another five minutes?
873 MS ROUTLEDGE: You are doing absolutely great. Go ahead. Five minutes.
874 THE CHAIRPERSON: I have a few specific questions.
875 Number one, what you are really asking us to do with respect to complaints is not to receive complaints from the banks, but inform the complainant that they must go to the bank and attempt to resolve their problem in a first‑stage process with you.
876 MS ROUTLEDGE: At the first stage, yes.
877 THE CHAIRPERSON: So you would create a situation, then ‑‑ presumably a precedent ‑‑ in which any telemarketing violation would have to be sent back to the telemarketer for a preliminary process before the government agency, whatever it turns out to be, would be seized of the complaint.
878 MS ROUTLEDGE: If the CRTC received a complaint, I would certainly imagine that they would record it or, in some way, deal with it.
879 THE CHAIRPERSON: We would record it all right, but the question is whether we would proceed or not.
880 MS ROUTLEDGE: We would like to see the organization be given an opportunity to deal with that complaint.
881 THE CHAIRPERSON: With the greatest of respect, you want a little more than that. You want us to tell the complainant to go to you first, whereas the complainant has chosen to come to another instance.
882 I want to be clear that that is what you are asking for.
883 If there is something else, tell me.
884 MS ROUTLEDGE: No, that is what we are asking for.
885 THE CHAIRPERSON: On the business‑to‑business, in which you are in favour, as a matter of principle, why would we want to prevent a business entity from registering its phone numbers on a Do Not Call List?
886 MS ROUTLEDGE: We believe, from a policy perspective, that this is meant to be a consumer protection measure, not a business protection measure.
887 Generally speaking, businesses are more sophisticated and don't need consumer protection measures.
888 THE CHAIRPERSON: So you are suggesting that the Commission would exempt business‑to‑business telemarketing and would tell Parliament, "You didn't really understand what you were trying to do. It's true that you didn't exempt it, but we have been told that you meant to, so we are exempting it."
889 I am sorry to phrase it that way, that is an unfair way to phrase it, but, fundamentally, that is what you are asking us to do.
890 MS ROUTLEDGE: I think the CRTC has the ability to expand the exemptions.
891 THE CHAIRPERSON: We do, indeed. We have the legal ability to do it, that's correct.
892 MS ROUTLEDGE: And we are asking you to consider doing it. We think it would be a good idea to do it.
893 THE CHAIRPERSON: So that the consumer's choice to solve problems in his own way is being compromised.
894 In the first place, he can't solve it with us until he solves it with you. In the second place, if a businessman says he doesn't want to be called, unfortunately, we know better and we are going to tell him that he can be called?
895 I am trying to understand where this is coming from. It doesn't seem to be placing a high premium on the consumer's choice.
896 MS ROUTLEDGE: I guess that it could be interpreted that way.
897 THE CHAIRPERSON: How would we, as a practical matter, prevent the registration of business numbers?
898 MS ROUTLEDGE: From a practical perspective, I guess, it would be difficult to prevent it. But I guess it is what is done with it after, when one is investigating a complaint.
899 THE CHAIRPERSON: In other words, we would accept the number, the business would complain, we would investigate, find out it was a business, and then tell him that he didn't have grounds for a complaint, because we would have passed an exemption.
900 That is, essentially, what you are proposing?
901 MS ROUTLEDGE: I guess what I would say is, if the rules were passed that it didn't include businesses, it should be clear to businesses upfront that they weren't covered and shouldn't be registering their number.
902 THE CHAIRPERSON: I am asking you, as a practical matter, how we would distinguish between a business number and a non‑business number when it came in the front door.
903 MS ROUTLEDGE: As far as I know, there is no way you can do that.
904 THE CHAIRPERSON: Yes, I think you are right.
905 On the question of registration, of who and what is being registered, do I understand it correctly that you would prefer that the registration system would be for a person and for a number?
906 MS ROUTLEDGE: Since we have made our March submission, we have been party to a number of the discussions, and I think we have come to the view that the number only would have probably less privacy risk and would probably be more efficient and effective to administer, so we would support the number only.
907 THE CHAIRPERSON: The method of authentication to ensure the identity of the person who is requesting that they be listed on a national DNCL, you say that there should be one, but we really need your help to describe what it should be.
908 MS ROUTLEDGE: I'm sorry?
909 THE CHAIRPERSON: You said in paragraph 6:
"The notice mentions the various methods of operating a national DNC list, including using a live operator, a fully automated system and the Internet to submit complaints or registrations. We believe that it is important that any system have a method of authentication to ensure the identity of the person who is requesting to be listed on the national DNCL, and that that person has the authority to register the given telephone number."
910 I understand what you are saying, but what would you suggest?
911 As a practical matter, what are you proposing to us?
912 MS ROUTLEDGE: I guess, initially, we were concerned that there would be people who would mischievously register someone else's telephone number.
913 I understand, though, from discussions with the operator of the U.S. Do Not Call registry, that that has not been a problem down there.
914 THE CHAIRPERSON: So you are less concerned about authentication.
915 MS ROUTLEDGE: We are less concerned about it at this stage of the game, yes.
916 THE CHAIRPERSON: You have to go. Is there anything that you would like to add or say?
917 You didn't have an opening statement; maybe you have a closing statement. And if you wish to put something on the record, we would be delighted to hear it.
918 Also, possibly there will be some Commission questions, but before we do that perhaps you would like to make a few remarks.
919 MS ROUTLEDGE: No, I think that the definition of "unsolicited calls" was the main point that I wanted to make in addition to what is there.
920 THE CHAIRPERSON: And the definition of "unsolicited calls" would not include a call where you were able to demonstrate, as a matter of explicit decision, that a consumer had in fact waived his right or expressed his preference to be called.
921 Is that fair?
922 MS ROUTLEDGE: Expressed a preference to be called, yes, through giving his consent.
923 THE CHAIRPERSON: Counsel.
924 Me. MILLINGTON: Oui, monsieur le Président, j'aurai une question.
925 I am going to refer to your document that you brought with you today, and I want you to help me with the logic that underpins the statement toward the end of page 2, which says: "We believe that the oversight and enforcement costs," and that is of this whole regime, "should be the responsibility of the federal government."
926 I am wondering why your organization believes that the proper party to pay for the costs of this program should be the taxpayers of Canada, as opposed to the industry players who earn money in the conducting of telemarketing and the provision of the underlying services that allow for telemarketing.
927 Why is it better for the taxpayer to bear the burden of this enforcement scheme rather than the industry players?
928 MS ROUTLEDGE: I think our rationale for it is that it is consumer protection legislation, that it is consumer protection that the government has decided to offer, and that, in many cases ‑‑ most other cases where the government is putting in consumer protection, the oversight functions are undertaken by the government.
929 We fully support the fact that the operation of the list should be paid for by the telemarketers.
930 MR. MILLINGTON: Which represents only a part of it, but I am still at a loss as to why any of the burden for the regime, which is, as you say, consumer protection ‑‑ and it is protection from people in the industry, presumably ‑‑ why that should be borne by taxpayers, as opposed to the people who are in the industry, who earn revenues and profit from the conducting of that business.
931 MS ROUTLEDGE: As I said, it is a general consumer protection benefit and the general public ‑‑ all taxpayers ‑‑ can benefit from it.
932 THE CHAIRPERSON: Ms Routledge, I hope we have released you at an appropriate time. We thank you very much.
933 MS ROUTLEDGE: I thank you very much for your understanding.
934 THE SECRETARY: Mr. Chairman, I am sorry to interrupt. I have something for CBA. I have undertakings for a few participants, and CBA is one of them.
935 THE CHAIRPERSON: That's fine.
936 These are the undertakings that we referred to earlier. You can pick them up on your way out. I know you are in a rush.
937 Thank you very much.
938 MS ROUTLEDGE: Thank you.
939 THE SECRETARY: Our next participant is Mr. Boyd McBride, for the Association of Fundraising Professionals.
PRESENTATION / PRÉSENTATION
940 MR. McBRIDE: Mr. Chairman, Commissioners and Commission Staff, good afternoon and thank you for allowing me to have this opportunity to testify here today.
941 I serve as the National Director of SOS Children's Villages, but I am testifying today as Chair of the Government Relations Committee of the Association of Fundraising Professionals.
942 As many of you know, the Association of Fundraising Professionals submitted written testimony to the CRTC in March, and my intention is that my remarks today would summarize the formal comments that we have already provided.
943 If I could indulge you for a moment, I would like to start with a brief story, just to underline some of the situations that we in the charitable sector face.
944 Just yesterday I received a letter from a woman who wrote to me saying that she was 90 years old and that her doctor had told her to get her affairs in order. She said, "I have written you into my will," that is, my organization, "but please send me confirmation of your address."
945 I picked up the phone and called her, and her response was, "Thank you, Mr. McBride. I have been waiting for your call."
946 This is a woman who could have phoned me, who, instead, wrote me a letter and asked me to send her written confirmation of my charity's address, but she said, "I have been waiting for your call."
947 That is the power of the telephone in the charitable sector. It connects people in a way that almost nothing else we do can.
948 Back now to my formal comments.
949 AFP represents about 27,000 professionals in 180 chapters around the world, 2,700 of those in Canada, in almost every major city. Our members work for charities, NGOs, charitable foundations, organizations that we all know and respect ‑‑ the health charities, the universities, the social welfare organizations, international aid agencies and the like.
950 We are looking after the needs of and stewarding relations with people who care enough about our communities to want to give over and above what they do through the tax system.
951 Therefore, the Association of Fundraising Professionals is vitally interested in any decision that seeks to impose new regulations or new constraints on charitable organizations and our activities with donors and perspective donors over the phone.
952 And so, we were very pleased, really very pleased with the government's decision to exempt registered charities from the new Do Not Call Legislation and we are committed to assuring that any new ‑‑ helping insurer as much as we can at any new decisions in this regard maintain the balance that we feel the Legislators came to.
953 We are also conscious, frankly, that this is a major exemption. Charitable sector is a very large sector and very busy, but a decision made in the interest of the public good.
954 Three key points I wanted to touch on and I have already mentioned the first that we are pleased that the CRTC has upheld this exemption as originally implemented by Parliament.
955 The second, and I'll come back to this, is that we would urge the CRTC to provide some form of guidance or education to the public about the exemption or exemptions as you work them through, so that Canadians will understand that charities are not subject to the restrictions on calling.
956 And finally, I guess, and this may be of more concern to you than anything else, that we urge that the CRTC implement telemarketing rules that are consistent with the National Do Not Call List exemption for registered charities.
957 Now, if I can talk for just a few minutes about justification for the exemption of registered charities and this may be ‑‑
958 THE CHAIRMAN: Well, Mr. McBride, you're exempt.
959 MR. McBRIDE: So?
960 THE CHAIRMAN: So, you really don't need to justify it again. Parliament made its decision.
961 MR. McBRIDE: All right.
962 THE CHAIRMAN: The Commission, notwithstanding your fears, has no intention of subverting the will of Parliament as you so delicately put it in your presentation.
963 So, please don't feel you have to explain to us why you need to be exempt.
964 MR. McBRIDE: Thank you very much, Mr. Chairman.
965 Well, then, I'll move to this, our comments on the educational component for the public. We are conscious that it is a major exemption taking that the charitable sector or the registered charities at least out of the Do Not Call List Legislation and we feel that it would be very helpful for our sector and in that sense I guess for the community at large, if people had a clear understanding of that and weren't surprised somehow when a call comes from the charity that they have been supporting over the phone for some time.
966 I am not sure what role the CRTC can play in publicizing that kind of exemption helping Canadians become aware of it, but we would certainly urge you to do what you can.
967 The third point then that I wanted to touch on was around this concern that as you work on regulations and bring greater definition to what the telemarketing rules should now be, that you keep in mind our exemption and do what you can to ensure that if the telemarketing rules, as they are amended, they don't in fact impose additional obligations on the charitable sector, that we don't have to deal with today.
968 And if regulations are being contemplated that might have some impact on our sector, we would like to feel that you would contact us and give us an opportunity to work with you, to help you understand what kind of impacts those might be and help mitigate them if they might be damaging for the charitable sector.
969 Thank you for your time. That's really the essence of the presentation we wanted to make today. I am, of course, happy to answer questions in the time we have before your lunch break.
970 THE CHAIRMAN: Well, thank you Mr. McBride.
971 Let me first say to you that today is the day and this is the moment for the other rules and in particular, you have been exempted by the Do Not Call List, from the Do Not Call List, but not from the remainder of the regulation of telemarketing that the Commission has or will put into place.
972 And it would have been helpful if you had looked at the existing status quo and been able to make the comments that you would like us to ask you to later make because they are on the agenda today.
973 But let me try to work with you to see if I can induce you to make some of the comments that would be relevant to us.
974 Do you think that your members should be required or rather, could you explain to me to what extent your members will regard it as a burden to fulfil their legal responsibilities, provided their own Do Not Call List specific to their own organization?
975 MR. McBRIDE: Our members would not see that as a burden. We see that as a responsibility.
976 THE CHAIRMAN: And you currently operate these Do Not Call Lists?
977 MR. McBRIDE: I can't speak for every charity represented by the membership of A.F.P., but it is widely understood that there is no value in our pursuing telephone relations donors who have told us they don't like to be contacted by phone.
978 THE CHAIRMAN: Would you regard it as part of the responsibilities of your organization to ensure that all of your members knew and possibly had access to expertise that would help them to establish such lists?
979 MR. McBRIDE: Absolutely.
980 THE CHAIRMAN: Yes. Would you regard it as appropriate that the Commission should regulate the hours of calling for telemarketing?
981 MR. McBRIDE: I believe that we would be quite comfortable with that, yes.
982 THE CHAIRMAN: And would you have any suggestions about what those hours of calling might legitimately be?
983 MR. McBRIDE: I think that what has been proposed by the Canadian Marketing Association would probably be acceptable to our membership.
984 THE CHAIRMAN: Do any of your members use fax for telemarketing purposes or solicitation purposes?
985 MR. McBRIDE: I don't believe we do. Now, most of our donor base is largely individuals.&nbs