Businesses brace for tough spam law

Legislation aimed at online junk mail could hurt small operators

—Smallbusinesses that use email for marketing and promotions are being urged to get ready for new anti-spam rules taking effect July 1.

Canada’s Anti-Spam Legislation, or CASL, is said to be the toughest law of its kind in the world. It’s aimed at cracking down on phishers, identity thieves and the sheer volume of unwanted email that clogs inboxes daily.

But legal experts and business groups worry that momand-pop shops could unwittingly find themselves in breach of the law if they don’t take steps to protect themselves.

“Without question, a huge percentage of business owners have no idea about the law or what it means, or even that it exists,” said Richard Truscott, Alberta director for the Canadian Federation of Independent Business. “There’s an enormous public education component with this, especially with business owners who, for the most part, will be the ones most affected.”

Under the new law, businesses will no longer be able to send commercial electronic communications—including email and text messages — unless they can prove they have the consent of the recipient. It means companies that regularly send out such communications must ask their contacts for permission to continue doing so.

It also means all commercial email communications sent by businesses must contain an “unsubscribe” button. Failing to honour unsubscribe requests will become an offence under the new legislation.

There are exceptions to the new rules. For example, if a company had an existing business relationship with a client, it is allowed to continue to send that client messages for up to 36 months after that business relationship has ended.

There is also an exemption for fundraising emails from registered charities.

Martin Kratz, a lawyer with Bennett Jones LLPin Calgary, said there is a “frenzy” going on right now as businesses and organizations rush to get communications systems into compliance with the new law before July 1. Not only do the rules require collecting consent from recipients, but records of consent must be made and retained.

“There are a whole bunch of record-keeping requirements,” Kratz said, adding most large companies have software systems that can manage the new requirements easily. “For small businesses that don’t have that kind of software, they’re going to be at a disadvantage.”

For a business that violates the law, the potential consequences are huge. The legislation comes with a maximum penalty of $1 million for an individual and $10 million for an organization. Class action lawsuits will also become possible in 2017.

Kratz said he is hopeful enforcement will focus on “egregious spamming organizations,” not the entrepreneur who forgets to update his newsletter’s “unsubscribe” list or the small business that mistakenly uses emails collected from its recent contest to advertise its next sale.

“The sensible strategy for initial enforcement would be to pursue the really bad actors, the organizations that are pursuing identity theft or phishing for personal information,” Kratz said. “It’s hard to see how going after the local landscape company or the local pizza place is going to be very helpful.”

Calgary Chamber of Commerce spokesman Scott Crockatt said some of the concern on the part of members stems from the fact digital marketing is an increasingly important strategy for many small businesses.

“That’s because of its effectiveness, but it’s also because digital marketing can be quite cost-effective for a business that may not have the money to do mainstream advertising,” Crockatt said. “Some people are thinking it (CASL) will cost them sales and income, increase their expenses, and delay their plans for projects.”

More information about the CASL legislation is available on the federal government’s website, www.fightspam.gc.ca