The CASL Law and Its Implications for Electronic Marketing

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Most marketers are already familiar with the United States CAN-SPAM law and its requirements for email communication, but few seem to be aware of the Canadian Anti-Spam Law (CASL) and its potentially huge impact on how people use electronic messages for marketing—even if they are not marketing to Canadians.

What is CASL?

Originally enacted in 2010, the Canadian Anti-Spam Law is supposed to suppress and deter occurrences of spam, identity theft, phishing, spyware, viruses, and false representation through electronic communication. By doing this, CASL and its proponents hope to encourage and promote ethical and tasteful ecommerce and improve customer experiences both online and offline. This latest iteration of the law is scheduled to go into effect in late 2013 or early 2014.

While the Canadian law shares the same principles as its U.S. counterpart, its approach is much stricter and prohibitive, with many new offenses, enforcement procedures, and penalties. If it goes into effect in its current state, it will be one of the strictest ecommerce laws in the world.

What does CASL cover?

Unlike the CAN-SPAM law, which covers only email, the CASL law applies to any form of commercial electronic messaging, including email, text messaging, instant messaging, social media, and possibly even voice communication.

CASL is also location-specific. It regulates any message sent from or received in Canada, with particular emphasis on where the message was accessed. Any recipient who opted-in in the USA would still be subject to CASL if the message was accessed in Canada.

CASL also regulates the nature of any relationship between sender and recipient. In order to send a commercial message, a sender has to have:

  • An existing business relationship
  • An existing non-business relationship

The above is called implied consent, and does not require additional action for either party. An existing business relationship lasts two years after the last transaction.  In all other cases, express consent must be obtained from the recipient prior to sending any communication. Proof of opt-in must be made available, which includes the source and time of the opt-in. Consent requests must clearly express the purpose of the message, and recipients must actively reply to the communication and overzealous marketing is not allowed.

What is Disclosure?

In order to properly comply with CASL, an electronic message needs to comply with the following disclosure requirements:

  • Clearly identify the message sender
  • Openly and clearly express that the message is commercial in nature
  • Have a clear and unambiguous subject line
  • Contain a valid and working unsubscribe mechanism that unsubscribes the recipient within 10 days and is available for at least 60 days after the message is sent
  • Contain a URL, email address, physical address, or phone number where the sender can be reached that is valid for up to 60 days after the message is sent

These disclosure requirements are meant to protect recipients from senders using misleading or false identities. It also gives recipients the ability to end a business conversation on their own terms in case they change their minds after giving consent.

What are the Penalties?

CASL’s primary enforcement agency would be the Canadian Radio-Television Communications Commission (CRTC). They would determine, hear, and issue offenses, as well as apply and collect the administrative monetary penalties (AMP) or fines. The maximum monetary penalty for an offense is ten million dollars per violation.

Although the CRTC will be the sole determiner of the size of the fine, they will be considering a range of factors including:

  • Purpose of penalty
  • Nature of violation
  • Scope of violation
  • Sender history
  • Ability to pay

It should be noted that while the suit can be filed civilly (by private individuals), the fines are not collected by them, in whole or in part; the private individual does not benefit financially from filing a suit. This should minimize the filing of nuisance suits and marginal cases.

Are there Any Exceptions?

As mentioned before, any prior existing relationships will be exempt from the CASL law. That includes employees of two businesses that have a business relationships, and whose message concerns the affairs of the companies involved.

Other exceptions include:

  • If the business is sending the electronic message in response to an inquiry by the recipient
  • If the sender does not know or couldn’t be expected to know that the recipient would access the message in canade (e.g., recipient goes on vacation in Canada without setting up an Out of Office message)
  • Messages sent for legal reasons such as warranty, recall information, or copyright notices
  • Debt collection messages
  • Third party referrals
    • The person or company making the referral must have an existing non-business, personal, or family relationship with both the sender and recipient
    • The sender must disclose the name of the person/organization that made the referral and must mention that the message is a direct result of that

What are the Implications for Marketing and Sales Teams?

Although the law is fairly specific in its penalties, conditions, and regulations, there are still areas where the law is ambiguous and unclear, and leaves organizations scratching their heads or consulting lawyers who are just as much in the dark.

Third-party lists. The combination of tight restrictions and wide scope make for a sales and marketing minefield—especially with the location-based restrictions. In an era where nobody can really tell where a person is from unless you view their private contact information (or they tell you themselves), I see many companies stepping on this mine repeatedly as the law gets rolled out. This will be a particularly thorny problem for those who compile, sell, or use third-party email lists. There will have to be due diligence on all sides in making sure that none of the contacts on the said lists are in potential violation of any of CASL’s restrictions.

Social media. The law doesn’t explicitly address social media. Different social media platforms work on different communications models and have trouble fitting under a blanket statement, so it Is understandable for the law to be vague on this account—but that doesn’t keep marketers from wondering if their next Twitter post is going to be the one that gets the company sued. As of the moment, nobody is really sure how CASL is going to affect social media, and what will be classified as “consent”.

Longer sales/marketing cycle. With the new permission-based law, the sales and marketing process now has an additional step to go through. And since it’s highly dependent on the timely responses of other people (those who don’t have a stake in your business), it can be difficult to mount a coordinated contact campaign without extensive preparation (assembling all consent well before the campaign actually begins). Not to mention that there has to be resources in place to scrub the leads before and after the campaign, to make sure you capture all of the unsubscribes.

How else do you think CASL will affect your sales and marketing practices?