Emails – the good, the bad, and the fraud

The Canadian Radio-Television and Telecommunications Commission ­ or CRTC ­ has the authority to administer the Telecommunications Act, including the National Do Not Call List (DNCL). Effective July 1, 2014, Canada’s Anti-Spam Legislation (CASL) will also be administered by the CRTC.  The DNCL and CASL are intended to protect the public from unwanted communications, including annoying phone calls and unwanted SPAM. 

People have to be extremely careful when they receive unsolicited phone calls and emails.  In this age of technology, automatic dialing machines and blanket emails can hit large populations quickly.  Caution should always be exercised when you are asked to provide any personal information. 

Unless you know for certain that the phone call or email is legitimate, you are best not to respond.  If the unexpected email or phone call is of a financial matter, we recommend that you hang up and phone your financial advisor.  Your advisor should be able to assist you after you provide the details of the phone call or email.    

In talking with clients, I explain to them that we put measures in place to protect their capital from fraud. We will not accept trading instructions over email or fax, and we will never carry through with a money transfer request without first confirming with our client either in person or on the phone.  Our team knows to be especially careful if we receive rushed explanations, or explanations that are out of the ordinary.  Extreme caution is necessary for any payments to third parties or to overseas bank accounts. 

While the Do Not Call List deals with unwanted phone calls, the Anti-Spam Legislation deals with Commercial Electronic Messages (CEM). The majority of financial advisors utilize email, or rather CEMs, as a means to distribute timely information quickly and efficiently.   CEM is not just marketing emails. 

For example, a financial advisor may be sending periodic emails with timely economic and market commentary, recent financial news, and investing and wealth management strategies.  Sending out event and meeting invitations electronically also falls under CEM.

Government statistics state that over 80 per cent of emails are considered SPAM.  CASL casts a very large net.  The concern is that the rules could prevent businesses from sending you legitimate emails.    The intention of the legislation is to eliminate the huge number of spam emails, not the legitimate ones.  Businesses should also know that the intention of the CRTC is to prevent businesses and organizations from sending email to people who have not consented to receive it.    

What will happen to the approximately 20 per cent of legitimate emails that you were receiving before July 1, 2014?   Will the anti-spam law’s large net prevent you from receiving emails that have relevant and timely information? 

A couple of smart solutions exist to ensure you continue to receive the good emails.  Businesses are still able to send you a CEM provided they have “consent.”  Consent is best understood by looking at two terms, “express consent” or “implied consent.”

“Express consent” is obtained when a business asks for your permission to continue sending CEM and you provide consent (i.e. you say “yes” or click accept on an email).  Many businesses have already created electronic marketing systems to keep track of those individuals who have provided “express consent”.  Some businesses are proactively sending CEM messages before July 1, 2014 requesting that you confirm continued receipt of CEM.  In asking for permission, the distributor of CEM must explain the reasons why they are asking for consent and provide the following information:  name, address, telephone number, and website.  The sender of the CEM must provide you the ability to unsubscribe from any future email communications if you so wish.  

“Implied consent” is best understood from looking at certain actions.  If an individual business owner receives an incoming email requesting information, then the business owner has implied consent and can respond to that email.  One incoming email does not provide ongoing “express consent.”  If the person who initially emailed a business does not reply to the business’s response email, the email chain ends and so does consent. 

Another example:  If a business relationship is already established in the previous two years, then “implied consent” exists.  Similar to the Do Not Call List, the anti-spam law also has exceptions to the general rules adding to the complexity, including exemptions for family, friends, and certain third-party referrals. 

In addition, when the new CASL rules come into effect, all CEMs must contain an unsubscribe feature so that people have the option to retract their express or implied consent, if they wish at a later date.

If you are concerned that you may not continue to receive some of your legitimate emails after June 30, 2014, then we recommend you contact the respective individuals or businesses to determine how they are managing “consent”.  You can respond “yes” to those businesses which have sent you an email requesting consent.  Another alternative is to proactively send the individual or business an email, such as, “I give you my consent to continue to send me emails to the following email address:  I reserve the right to unsubscribe at a later date.” 

Financial advisors and companies are taking this very seriously.  The CRTC may impose hefty fines on individuals and businesses violating the Do Not Call List and new anti-spam rules.    If a person breaks the Do Not Call List rules, the penalty could be $1,500 per violation, and up to $15,000 for businesses.  The fine for violating anti-spam law for individuals is as much as $1 million per occurrence.  Businesses breaking the anti-spam rules could be fined up to $10 million per occurrence.