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Offrir un contenu dans les deux langues officielles

Prière de noter que la Loi sur les langues officielles exige que toutes publications gouvernementales soient disponibles dans les deux langues officielles.

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Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience.

 

 

 

 

 

 

 

              TRANSCRIPT OF PROCEEDINGS BEFORE

             THE CANADIAN RADIO‑TELEVISION AND

               TELECOMMUNICATIONS COMMISSION

 

 

 

 

             TRANSCRIPTION DES AUDIENCES DEVANT

              LE CONSEIL DE LA RADIODIFFUSION

           ET DES TÉLÉCOMMUNICATIONS CANADIENNES

 

 

                          SUBJECT:

 

 

 

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

 


 

 

 

 

Transcripts

 

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

Contents.

 

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.

 

 

 

 

Transcription

 

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

               Telecommunications Commission

 

            Conseil de la radiodiffusion et des

               télécommunications canadiennes

 

 

                 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 /

Conseiller juridique

 

 

 

 

 

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

  Fundraising Professionals

    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.

Bonjour.

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.


620              In our case, if I can speak for TD Meloche Monnex, we have a brochure that we send to all of our customers to explain what we will do with the information and how they can find out more information about our privacy policy.

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.

632              Counsel.

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