Report on the Operation of the National Do Not Call List (DNCL) for the period April 1, 2014 to March 31, 2015

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Presented to: Minister of Industy

September 30, 2015

Chairman's message - National DNCL Report

I am pleased to present the Canadian Radio-television and Telecommunications Commission's (CRTC) report on the National Do Not Call List (DNCL) for 2014-2015. This report provides an overview of the activities undertaken by the CRTC to ensure telemarketers respect the choice Canadians have made not to be disturbed in their homes.

Canadians have registered over 12.5 million numbers on the National DNCL to reduce the number of unsolicited telemarketing calls they receive. Over the past year, they added an average of 1,600 new numbers to the list every day. This is a strong indication Canadians believe the National DNCL is an effective tool to help them maintain their privacy.

The CRTC's primary objective is to encourage telemarketers to comply with the Unsolicited Telecommunication Rules that govern unsolicited calls. We conduct a number of annual education and outreach activities to help businesses understand their obligations. We also do not hesitate to take action to bring those who commit egregious violations into compliance.

Last year, these enforcement actions targeted telemarketers, including those in the vacation and home improvement industries, who made over 25 million non-compliant calls to Canadians. Some telemarketers were located outside Canada, which required us to work closely with our international and domestic partners to successfully resolve these cases.

As a result of our investigations, we issued nearly three dozen notices of violation totaling over $2 million in penalties.

Despite these successes, enforcement agencies around the world are faced with the challenge of caller identification spoofing. This occurs when callers use technology to conceal their identity, causing false or misleading information to appear on a telephone's call display.

The CRTC is collaborating with an international network of enforcement agencies to combat this abuse of the telecommunications system, and this work will lead to broader initiatives in Canada during 2015-2016. The National DNCL is a key component of the CRTC's objective to protect Canadians through their communication system. This role is evolving as we shield Canadians from online threats by enforcing certain sections of Canada's Anti-Spam Legislation. We are also preparing to launch, at Parliament's request, a Voter Contact Registry to help protect Canadians from rogue and misleading telephone calls during federal elections.

A recent survey revealed that 66% of Canadians believe that the CRTC is taking measures to enhance their safety and to safeguard their privacy in the communication system. We are proud of the work we are accomplishing in this vital area. In the coming year, we will look to innovative strategies and collaborative approaches to continue to protect Canadians from unsolicited communications.

The CRTC

The Canadian Radio-television and Telecommunications Commission (CRTC) is an administrative tribunal that regulates and supervises Canadian broadcasting and telecommunications in the public interest. Its mandate includes the responsibility to protect Canadians from unsolicited telecommunications. Further background information on the National Do Not Call List (DNCL) and the CRTC's recent enforcement activities may be found on the CRTC's website.

The main legislative authorities for the CRTC are

The Telecommunications Act requires that the CRTC report on the operation of the National DNCL on an annual basis, as follows:

41.6 (1) The Commission shall, within six months after the end of each fiscal year, deliver a report to the Minister on the operation of the national do not call list in that fiscal year.

Content of report

41.6 (2) The report shall set out any costs or expenditures related to the list, the number of Canadians using the list, the number of telemarketers accessing the list, any inconsistencies in the prohibitions or requirements of the Commission under section 41 that are applicable to the operation of the list, and an analysis of the effectiveness of the list.

Tabling of report

41.6 (3) The Minister shall cause a copy of the report referred to in subsection (1) to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the Minister receives the report.

How the National Do Not Call List (DNCL) Works

In 2006, Parliament amended the Telecommunications Act to grant the Canadian Radio-television and Telecommunications Commission (CRTC) the authority to establish a national do not call list. This authority extended the CRTC's existing powers to regulate unsolicited telecommunications. In 2007, the CRTC established a comprehensive regulatory frameworkFootnote 1 for unsolicited telemarketing calls and other unsolicited telecommunications. The aim of the framework is to protect the privacy of Canadians and prevent undue inconvenience and nuisance from unsolicited telecommunications, while still allowing legitimate uses of telemarketing telecommunications.

The Unsolicited Telecommunications Rules (the Rules)

The protection against specific types of unsolicited telecommunications is governed by the Rules, which comprise three main parts:

The Rules apply to those who conduct unsolicited telecommunications, whether for themselves or on behalf of a third party. Telemarketers are prohibited from initiating a call to a number that has been registered on the National DNCL. Telemarketers are also required to maintain their own internal do not call lists (internal DNCLs). An internal DNCL is a list that a company must keep to track requests from consumers and businesses to have a number added to their internal do not call list, whether or not their telecommunications numbers are registered on the National DNCL.

Bell Canada is currently operating the National DNCL on a multi-year-contract basis. As the National DNCL operator, Bell Canada is responsible for:

The National DNCL - Results for 2014-15

This graphic shows the CRTC's compliance cycle: Promoting Compliance, Monitoring Compliance, Investigating Non-Compliance, Responding to Non-Compliance.

The CRTC's compliance and enforcement work under the Rules encompasses four major activities that, supported by regulatory policy development, contribute to the CRTC's goals of promoting compliance and discouraging violations. These activities are interdependent and complementary, but they each serve a different purpose and can be applied in combination as appropriate to the circumstances at hand.

Promoting Compliance

The CRTC engages in compliance promotion activities so that entities have the information they need to conduct unsolicited telecommunications in a manner that is in compliance with the Rules. The CRTC uses a range of communications products and distribution channels, including social media, to raise awareness, provide guidance, and inform telemarketers of their regulatory "do's and don'ts".

They include:

The CRTC often targets these activities towards specific industry sectors in which awareness of the National DNCL may be low. The CRTC's communications products are continually updated to reflect changes in CRTC policies and past experience with the Rules. The CRTC also responds to calls, emails, and other types of correspondence from Canadians seeking information about the Rules and the National DNCL.

As part of a strategy to promote general compliance with the Rules, the CRTC also communicates on its website the results of its investigations into non-compliance, which may lead to the issuance of citations or notices of violation (NoVs), and the lists of entities that receive citations and NoVs. These enforcement actions are described on pages 11 to 15.

The CRTC also provides information to Canadians about the National DNCL, for example, how they can protect themselves by registering their telecommunications numbers on the List, and how they can assist the CRTC by filing complaints with the National DNCL operator. Information on Canadians' participation in the National DNCL is set out on page 16.

2014-15 Results

In 2014-15, the CRTC undertook 17 compliance promotion activities to encourage Canadian consumers and telemarketers to participate in the National DNCL. The CRTC delivered outreach sessions in Edmonton, Montreal, Regina, Toronto, Vancouver, Victoria, and Winnipeg, reaching industry groups, business associations, and consumer groups. The CRTC posted enforcement advisories and press releases on its website to raise awareness of specific issues and provisions of the Rules. For instance, as a result of an investigation that revealed significant and widespread non-compliance with the Rules in the real estate sector, the CRTC undertook targeted outreach and posted an enforcement advisory on its website to complement its enforcement actions.

The CRTC's web pages that provide information about the Rules and the National DNCL received over 93,000 unique visits.

Monitoring Compliance

The CRTC works under the assumption that most telemarketers and others who conduct unsolicited telecommunications want to be in compliance with the Rules and participate in the National DNCL regime. Compliance involves registering with the National DNCL operator and purchasing subscriptions to the List before making telemarketing calls to Canadians. The National DNCL operator plays a key role in the CRTC's monitoring of compliance with the Rules.

The CRTC also collects and analyzes complaints and other data to guide its compliance and enforcement activities. In selecting cases to investigate, the CRTC considers, among other factors, whether there are significant compliance issues or trends that emerge in a particular industry sector or that are widespread, whether there are cases that would provide important clarification on the application of the Rules, or whether there are repeat violators.

For instance, in the latter category, telemarketers that, as a result of violations of the Rules, have concluded a negotiated settlement with the Chief Compliance and Enforcement Officer are often required to submit reports that set out their compliance programs, usually within three months of the date of the settlement agreement. Such compliance programs typically include developing corporate compliance policies and procedures; implementing training and education programs; implementing mechanisms for monitoring, auditing, and reporting; adopting consistent disciplinary procedures; and eliminating any corporate policies that may provide incentives for employees to violate the Rules. The CRTC monitors compliance with negotiated settlements and follows up on cases of repeat violations.

The CRTC also conducts inspections of business premises to monitor compliance with the Rules, or as part of its investigations.

2014-15 Results

Telemarketers participate in the National DNCL by both registering and subscribing to the List. Since the inception of the National DNCL in 2008, there have been over 11,000 telemarketer registrations with the National DNCL operator.

Of these, over 550 (5%) registrations were from entities originating from countries outside Canada, the majority of which were from the U.S. Over 220 (2%) of registered entities have re-registered with the National DNCL operator every year since 2008.

In 2014-15, 875 telemarketers were registered with the National DNCL operator, an increase of 23% over the previous year. Of those telemarketers, 38 were from outside Canada, including 36 from the U.S., France, and Jamaica.

In 2014-15, telemarketers that were registered with the National DNCL operator bought 2,243 subscriptions to the List, to obtain access to telecommunications numbers ranging from one area code for one month to all area codes for a year. This represents an increase of 153 subscriptions, or 7%, from the previous year.

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Investigating Non-Compliance

The CRTC's investigations into potential non-compliance with the Rules are becoming increasingly complex due to the volume, nature, and foreign origin of the violations, as well as advances in technology. Whereas consumer complaints have historically been the predominant basis for case selection, other data sources are growing in importance. For example, as a result of its efforts to develop partnerships with other enforcement agencies, the CRTC is increasingly receiving case leads from domestic and international partners with respect to alleged violations of the Rules that span across jurisdictions. Such cases may involve telemarketing calls that trigger possible criminal offences, such as fraud. In 2014-15, the CRTC also invested resources in the development of new technology solutions in an effort to provide an early warning system and collect data on spoofed telemarketing calls. An example of such technology is voice honeypotsFootnote 2, which are used to track telemarketing calls to unassigned phone numbers. The CRTC hosted a workshop that included representatives from domestic and international service providers, as well as from regulatory and law enforcement agencies, to explore a range of technology and policy options for reducing illegitimate caller identification (ID) spoofing. As a result, a honeypot was created through collaboration between the CRTC and partners.

The CRTC's approach to investigations is supported by large amounts of data collected from multiple sources including complaints and honeypots, and various analytics. The CRTC's intelligence analysts process data using a variety of sophisticated tools and technologies to generate intelligence, which is in turn used to make strategic decisions on where to invest compliance and enforcement efforts, and to identify high-impact cases to investigate. The intelligence is also used to design compliance strategies that are tailored to particular issues across industry groups or particular industry sectors.

2014-15 Results

In 2014-15, the CRTC implemented strategies to improve its capacity to reach violators of the Rules beyond Canadian borders and address issues raised by technological advances, such as illegitimate caller ID spoofing. These strategies entailed:

Responding to Non-Compliance

Following intelligence-led case selection and investigations, CRTC officers take enforcement actions to bring entities in violation of the Rules back into compliance. These officers use their discretion in selecting and applying the most appropriate enforcement response for each set of circumstances. Possible enforcement responses include the following:

2014-15 Results

CRTC Enforcement Process

This graphic sets out the steps involved in the CRTC's enforcement process, from intelligence gathering and investigations, to enforcement responses, to payments or possible appeals through the legal system. Each step in this process may take some months, and the entire process may span over several fiscal years.

This graphic shows steps in the process for enforcement of the UTRs

Enforcement Highlights

Duct cleaning calls

A detailed analysis of thousands of complaints submitted by Canadians about unsolicited calls for duct cleaning services enabled CRTC investigators to identify several duct cleaning companies in the Greater Toronto Area (GTA) that allegedly engaged in numerous violations of the Rules through foreign call centres.

Given the cross-border nature of the duct cleaning calls, the CRTC conducted investigations in collaboration with domestic and international partners. CRTC enforcement officers conducted 12 inspections in the GTA. Working with the RCMP, and enforcement partners in Islamabad, the CRTC engaged the services of Pakistani law enforcement authorities to issue warning letters and citations to the telemarketing call centers in Karachi, Pakistan that were making calls to Canadians on behalf of the duct cleaning companies located in the GTA.

The CRTC found 9 Canadian duct cleaning companies to be in violation of the Rules, and reached negotiated settlements with 4 of these companies, which included payment of a total of $55,000 in AMPs. The Chief Compliance and Enforcement Officer also issued AMPs totaling $94,000 to the 5 other duct cleaning companies.

The telemarketing activities of the call centers that made the illegal calls as part of these cases will be monitored in 2015-16, and any repeat violations may result in more stringent enforcement actions.

Following the CRTC's enforcement actions in 2014-15, a representative of the National Air Duct Cleaners Association informed the CRTC that the association noticed a reduction in the number of telemarketing complaints related to duct cleaning companies. Moreover, in the weeks following the publication of the CRTC's enforcement actions, complaints to the National DNCL operator related to duct cleaning calls dropped from an average of over 11% to an average of 3% of all weekly complaints.

Vacation calls

A Florida-based travel company that made calls using an automatic dialing-announcing device (ADAD) to tens of thousands of Canadians offering free cruises to the Bahamas in exchange for answering a survey paid an AMP of $200,000 for violations of the Rules. The violations included using an outdated version of the National DNCL, failing to display an originating telephone phone number, and failing to obtain express consent from consumers prior to initiating these ADAD calls. In addition to paying the AMP, the company agreed to cease making telemarketing calls to Canadian consumers. The CRTC worked closely with the U.S. Federal Trade Commission during the course of this investigation.

An Ontario company that made calls in violation of the Rules to promote the sale of timeshare properties was issued an AMP of $20,000, and agreed to implement a compliance program. This company was calling Canadians without being registered with the National DNCL operator, had not subscribed to the List, and failed to comply with requests from consumers to be added to their Internal Do Not Call List.

Misuse of the List

The Rules set out that telemarketers may gain access to telecommunications numbers on the National DNCL only by means of registration with the National DNCL operator and paid subscriptions to the List. Following a lengthy investigation, the CRTC found that a Quebec-based company that provides telephone directory services to real estate agents, amongst others, had divulged the contents of the National DNCL to its clients, contrary to the Rules. In addition to paying an AMP of $260,000, the company agreed to implement a compliance program.

Credit card calls

The CRTC worked with the Canadian Anti-Fraud Centre and the U.S. Federal Trade Commission to investigate an Arizona-based company that was calling Canadians to offer low credit card interest rates for a fee. The Chief Compliance and Enforcement Officer issued a NoV with an AMP of $145,000 to this company for making ADAD calls to Canadians whose numbers were registered on the National DNCL without their prior consent. The company also failed to display the telephone number from which the calls originated, and did not provide a local or toll-free number where it could be reached. Finally, the company failed to register with the National DNCL operator and subscribe to the List before making the calls.

Calls made while not being a registered charity

The CRTC investigated a company that was calling Canadians to seek donations of used clothing to be sold in their thrift stores in Ontario and British Columbia. In addition to telemarketing without a valid registration with the National DNCL operator and subscription to the National DNCL, the company attempted to rely upon the registered charity exemption set out in the Rules, for which it did not qualify. The company agreed to pay the AMP of $250,000 and implement a compliance program.

Regulatory Policy and Process

The CRTC administers the Rules and, as such, it must ensure that they evolve in response to advances in technology, business models, and Canadians' evolving privacy needs. Accordingly, the Commission will, from time to time, engage Canadians in public proceedings to solicit input on potential regulatory or policy changes.

2014-15 Results

Following a public consultationFootnote 4 initiated in 2013-14, the CRTC issued a decisionFootnote 5 in which it rendered registrations of telecommunications numbers on the National DNCL permanent. Going forward, Canadians no longer need to renew or re-register their telecommunications numbers on the List, and may still unsubscribe from the List at any time. This change enhances the CRTC's ability to protect Canadians from unwanted telemarketing calls and spares them the inconvenience of having to re-register their telecommunications numbers on the List.

Canadians' Participation in the National DNCL

In 2014-15, Canadians in all provinces and territories continued to register their telecommunications numbers on the National DNCL. Specifically, they registered 589,286 numbers for their landlines, mobile phones, and fax machines, an average of over 1,600 numbers per day. During the same period, some 3,570 numbers were deregistered from the List.

Since the inception of the National DNCL in 2008, Canadians have registered 12,773,208 telecommunications numbers and deregistered 55,843 numbers.

Number of Registrations by Province/territory

Province/territory Number of Registrations
Alberta 1,417,310
British Columbia 1,566,761
Manitoba 404,512
New Brunswick 244,344
Newfoundland and Labrador 140,189
Nova Scotia and Prince Edward Island* 379,182
Ontario 5,443,470
Quebec 2,835,385
Saskatchewan 329,176
Yukon, Nunavut and Northwest Territories*^ 12,879
Total 12,773,208

Canadian number registrations by province/territory as of March 31, 2015

This bar graph shows the same numbers as the chart

In addition to registering their numbers on the National DNCL, Canadians also filed complaints with the National DNCL operator, by phone or an online form. In 2014-15, Canadians filed 115,135 complaints via the National DNCL toll-free line and website, a decrease of over 11% from the year before. These complaints were related to each part of the Rules, including those related to the National DNCL, ADADs, and "dead lines" (cases where there is no caller on the line). Canadians also contacted the CRTC directly with complaints, questions, and comments about telemarketing over 6,500 times.

* Data for these locations is not separated since they share one area code.

^ Includes non-geographic area codes, e.g. for mobile satellite phone service in remote areas of Canada where conventional telecommunications infrastructure is not available.

Complaints received by type of alleged violation, 2014-15

This pie chart shows the percentage of types of alleged violations

In comparison with 2013-14, complaints about both internal DNCLs and ADAD calls increased by 2% in 2014-15, and complaints related to the National DNCL declined by 3%. More than 3.5% of complaints were due to calls reportedly from the vacation industry sector, while 4% were attributed to companies offering reduced interest rates on credit cards.

Canadians in all regions made complaints. Notably, a large proportion of complaints, relative to the total population of Canada, came from Ontario.

Origin of complaints to the National DNCL, by province/territory

Province/territory Number of Complaints
Alberta 12,901
British Columbia 12,839
Manitoba 4,183
New Brunswick 1,567
Newfoundland and Labrador 655
Nova Scotia and Prince Edward Island* 3,044
Ontario 54,742
Quebec 22,484
Saskatchewan 2,677
Yukon, Nunavut and Northwest Territories*^ 43
Total 115,135

* Data for these locations is not separated since they share one area code.

^ Includes non-geographic area codes, e.g. for mobile satellite phone service in remote areas of Canada where conventional telecommunications infrastructure is not available.

Complaints by province/territory 2014-2015

This pie chart shows the same numbers as the chart on page 18, as percentages

* Data for these locations is not separated since they share one area code.

^ Includes non-geographic area codes, e.g. for mobile satellite phone service in remote areas of Canada where conventional telecommunications infrastructure is not available.

National DNCL Costs and Expenses

At the outset of 2014-15, the CRTC's costs to administer the National DNCL regime for that year were estimated to be $3,300,000. The actual costs were $3,028,496.

The revenue target for unsolicited telecommunications fees collected was $3,300,000. The actual amount of unsolicited telecommunications fees collected was $3,090,450, or 94% of the revenue target, a shortfall of $209,000.

The CRTC put in place cost containment measures, such that the actual costs related to it's operation did not exceed the revenue collected. The CRTC's continued vigorous and effective enforcement actions have encouraged telemarketers to comply with and subscribe to the National DNCL. The CRTC undertook internal research and analysis regarding the fee structure for subscriptions to the National DNCL, in collaboration with the National DNCL operator.

The current subscription fee structure has been in place since 2011. This work paved the way for a public consultationFootnote 6 on the appropriateness of the fee structure to be initiated in 2015-16. Results from this consultation will be reported in the 2015-2016 Annual Report.

National DNCL Expenditures

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