SMS & Canada’s Anti-Spam Legislation (CASL)

Disclaimer: This article is for information only. It will not substitute consultation with appropriate legal counsel and your organization’s regulatory compliance team.

Canada used to be home to 7 of the world’s top 100 spamming groups. The absence of rules to restrict spamming was quite apparent. Adequate legislation was introduced on July 1, 2014, under which Canada’s Anti-Spam Legislation (CASL) came to existence to enhance digital marketing by uprooting spamming and related issues. This legislation resulted in positive achievements.

By 2017, there were only 2 of 100 spamming groups in operation. Studies show a 37% decrease in Canadian-based spamming and 29% less email (spam or legitimate) in Canadians’ in-boxes during the first year of legislation.

Other organizations are working with CASL. The Office of the Privacy Commissioner of Canada (OPC) shares responsibility for enforcing CASL with the Canadian Radio-television and Telecommunications Commission (CRTC) and the federal Competition Bureau.

Below, we will review the essential rules, the importance of observing them, and the penalty for not following them.

The first step of CASL compliance for SMS marketing is getting consent. There are two ways to follow them:

• Implied consent: Implied consent is based on an existing business relationship between the sender and the recipient. An existing business relationship happens a) where the recipient has made purchases from you in the past two years or b) where they made an inquiry in the last six months, then you are allowed to have their contact in your SMS marketing lists.

Note: The validity of implied consent is as above; after these two periods, express permission will be necessary again.

• Express consent: Your recipient provides explicit oral or written permission for you to message them. In case of a dispute, the burden of proof is on your organization.

Note: Express consent must come from an opt-in mechanism. Standard opt-in tools include sign-up forms, landing pages, and old school methods such as collecting business cards at events.

Tip: Throughout a business relationship, asking for express consent is recommended in various touchpoints. Even if implied consent is still valid, warrant implied consent as a safeguard.

You should know that just because you have the legal right to send SMS to customers doesn’t mean it is appreciated. Repelling customers is much easier than generating one. Sometimes just a step out of the lines could destroy your brand, reputation, and business. Therefore, the next step is identification. Your first SMS is critical. It must contain your title, who you are, how to contact you, how frequently you will send SMS, whether it will cost your recipient or not, what your purpose is, and most importantly, how to opt-out.

Tip: If the content of SMS is too long, you can summarize it by adding a link to your website or a specific page for more information.

Although we already stressed the importance of “how to opt-out”, this subject is still too critical not to become a step for itself. It’s advisable to have an opt-out/unsubscribe option. Remember, at the end of each SMS to any customer, provide a way to opt-out of your program.

Now that we have reviewed the main rules, here are the penalties under CASL, which could be severe. They include:

• Administrative Monetary Penalties (AMPs): It consists of fines of up to $1million for individuals and up to $10 million for corporations per violation.
• Vicarious liability: In this case, the corporate directors can be found liable for the wrongful acts of a corporation or organization. The corporation may be at fault for the unlawful conduct of its employees.
• Private rights of action: As of July 1st, 2017, individuals can sue another individual or organization for damages after proving actual harm or loss after receiving an unsolicited and unwanted message. An individual cannot sue an organization if the CRTC already has taken legal action against it.

Note: Rules may apply to any entity or organization that is based or operating in Canada.