The Impact of the Canadian Anti-Spam Law for Dummies

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As SPAM laws continue to evolve and become more restrictive, they are really only a problem for the companies that abuse digital marketing practices. When we look at our survey data, about 89% of brands still send email communications to recipients who haven’t opted in (to comply with US CAN-SPAM legislation which requires commercial emails to include the ability for recipients to opt-out). Top Performers, however, use segmentation and targeting practices to maximize the relevance of those communications. It’s SPAM and it’s intrusive if the communication isn’t relevant for the recipient.  But new legislation from Canada will take effect on July 1, 2014 that will restrict businesses from delivering commercial electronic messages to with prospects and customers unless they expressly consent to the communication by physically opting in.  That’s a whole different ballgame.

The July 1, 2014 date marks the beginning of a three year grace period for businesses to start embracing the new legislation which impacts any business communicating with computer hardware that resides in Canada.  With potential fines as high as $10 million dollars per penalty, it’s definitely something marketers and IT professionals need to take a closer look at.  Bottom line, it’s not going to be easy for businesses to embrace these new practices given the current fragmented and eclectic state of marketing technology infrastructure – especially among large global brands.

What does the Canada Anti-SPAM Law Really Mean for Businesses?

What does the Canada Anti-SPAM Law Really Mean for Businesses?

The Canadian anti-SPAM law (CASL) is very different from CAN-SPAM, under which a brand merely has to provide the ability to opt out of future communications. With CASL a recipient must give express opt-in consent and brands must be capable of proving this with records.

What to look out for in the CASL

So what does all this really mean for your company and your marketing practices? Let’s break it down:

The CASL in a nutshell

  • After July 1, 2017, you will have to receive consent from a recipient of any electronic communication (including electronic requests for consent).
  • You must keep a record of all consent and continue to offer recipients the ability to opt-out.
  • The law applies to computers located in Canada.
  • Outside of express consent, a purchase is considered an exception, and brands have a 24-month period to engage buyers electronically. If the buyer does not make a new purchase or expressly opt in within that timeframe they cannot be contacted electronically after 24 months.
  • Individuals have a private right of action against corporations starting July 1, 2017. This is controversial because it effectively places policing violations in the hands of recipients.
  • You have 10 days to comply with an unsubscribe request.

Before July 1, 2017

  • You have a grace period of 3 years after July 1, 2014, to start getting consent and preparing the organization to comply with the law by 2017. During this period implied consent is sufficient.
  • Implied consent is defined in a number of ways and includes personal or family relationships, inquiries, partially completed abandoned shopping carts, etc.
  • If you obtain valid express consent before July 1, 2014, then that express consent remains valid after the legislation comes into force. It does not expire until the recipient withdraws their consent.
  • You should use the grace period to attempt to receive express consent electronically (for anyone that falls under the “implied consent” category).
  • Clean up your contact lists internally; accurate addresses will be very important in the future when electronic email may not be an option.

After July 1, 2017

  • You must have express opt-in consent before sending electronic communications.
  • If your business violates the law, individuals can bring suit against you in a private right to action.
  • You must keep records of all consent – so that might require new contracts, agreements, and digital archiving practices to ensure that you are not in violation.
  • You may be forced to return to phone, fax, and direct mail to communicate with individuals.
  • You will continue to need an unsubscribe option in all communications.
  • If you violate CASL, you may be required to pay a penalty called an AMP. The maximum amount of an AMP, per violation, is $1 million for an individual, and $10 million for a business.
  • Directors, officers, and agents of a corporation can be liable if they directed, authorized, assented to, acquiesced in, or participated in the commission of the violation.
  • If communications are delivered by an affiliate or partner who has input with respect to the content, all parties must be identified in the electronic message, or a link can be created whereby this information is readily accessible.

What does the CASL mean for businesses?

There are a variety of potential ramifications, which at this point are largely speculation. But this law could mean one or more of the following:

  • Businesses may entice or reward opt-in consent with special offers or discounts.
  • It may lead to higher investments in marketing as budget shifts to more expensive options such as direct mail or phone.  You can continue to promote your business via phone and direct mail, which may also lead to an increased volume of direct mail in Canada – which can be equally as frustrating as electronic messages.
  • There will likely to be a handful of litigious folks who will take advantage of mistakes or errors from brands that lead to shocking penalties. The ability for individuals to pursue cases makes it much harder for brands to abuse practices and avoid getting caught.
  • Marketing infrastructure that is fragmented and disconnected will compound violations. Fragmented tools also make it nearly impossible to manage opt-in and opt-out preferences holistically. CMOs will seek centralized visibility into outbound communications, which may drive increased investments in comprehensive “Customer Experience” platforms in lieu of disconnected best-of-breed offerings.
  • After July 1, 2017, the electronic opt-in lists on Canadian customers will contain highly engaged individuals, which could lead to more comprehensive customer segmentation and targeting practices. In other words, the results may shed some light on the types of individuals who have a propensity to engage with the brand – information that may be useful for other regions.
  • Large brands may start to employ teams of CASL compliance individuals who would, in aggregate, be less costly than potential penalties from violations. Over time, we are also likely to see larger penalties for companies that violate the law multiple times in a given time period.
  • Brands will be forced to learn best practices that will result in more engaged recipients and therefore higher click-through rates and conversion rates (if communications and offers are relevant). Now that the law is forcing the investment in infrastructure to manage opt-in consent, the same infrastructure can be adopted across all regions.
  • Inbound marketing tactics will become even more critical in Canadian markets, where customer engagement is the only way to ask for the opt-in

Republished with author's permission from original post.

Ian Michiels
Ian Michiels is a Principal & CEO at Gleanster Research, a globally known IT Market Research firm covering marketing, sales, voice of the customer, and BI. Michiels is a seasoned analyst, consultant, and speaker responsible for over 350 published analyst reports. He maintains ongoing relationships with hundreds of software executives each year and surveys tens of thousands of industry professionals to keep a finger on the pulse of the market. Michiels has also worked with some of the world's biggest brands including Nike, Sears Holdings, Wells Fargo, Franklin Templeton, and Ceasars.

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