Canada’s long-awaited commercial electronic message rules were released earlier this year and will take effect on July 1, 2014. The Canadian Real Estate Association (“CREA”) has shared with NAR the guidance it has prepared for its members . The Canadian law requires that the sender must have obtained the recipient’s consent in one of the enumerated ways before sending the commercial electronic message.
The purposes of this article is to briefly summarize the new rules for commercial electronic messages sent to Canadians, and then examine the differences between the U.S. laws and the new Canadian law. While similarities exist between the two laws, they are some important differences.
I. Overview of the Canadian Law
The Canadian Anti-Spam Legislation (“CASL”) law applies to all emails, text messages, and other electronic messages sent for marketing purposes into Canada. The CASL contains significant penalties, with potential fines of up to $10 million per violation. In addition, the law contains a private right of action for recipients that will take effect in 2017.
The CASL applies to messages involving a commercial activity, and so would include the marketing of services, the promotion of properties listed for sale, or the benefits of association membership. The CASL is not just limited to emails, and includes other kinds of electronic messages such as text messages.
Even if the message is a commercial message regulated by the CASL, there are exceptions for certain messages. Some of the exceptions include: messages sent to a family member or a person whom the sender has a personal relationship with; responding to an inquiry about a product or service; responding to a complaint about a product or service; messages between employees; messages between two businesses that have a relationship (i.e., two brokers working cooperatively on a sales transaction); and messages to enforce a legal right.
If the message is a commercial message covered by the CASL and not covered by an exception, then the CASL requires the sender to have obtained either express or implied consent from the recipient. Express consent can be obtained in writing, electronically or verbally. When obtaining express consent, the sender must provide the name of the business, a mailing address, and either a phone number, email, or website address. When you are seeking consent, you must clearly explain the purpose for making the request, and should explain the type of communications that the individual can expect to receive if they consent.
Implied consent can arise in a number of contexts. First, there is an exception for non-business relationships, which is defined as: (a) charity or political party which the recipient has either contributed or volunteered time within the past two years, or an association (like a REALTOR® association) or club which the individual has been a member within the past two years; (b) the sender has an existing business relationship with the recipient in the past two years or has received an inquiry from the recipient in the past 6 months; (c) the recipient has conspicuously published their electronic address and has not stated that he/she does not want to receive unsolicited messages; and (d) the sender has received the recipient’s address, the recipient has not stated that he/she does not want to receive unsolicited messages, and the content of the message is related to the recipient’s business.
In addition to the above, there is also a referral implied consent provision. If an individual receives a referral from someone who has a family relationship, personal relationship, or an existing business relationship with the recipient, the individual can send one message to the person. In the message, the sender must identify the source of the referral.
There is a transitional period, which allows anyone who has an existing business or nonbusiness relationship with the recipient prior to July 1, 2014. Anyone with this type of relationship will have an implied relationship with the recipient until July 1, 2017, during which time they can attempt to obtain express consent from the recipient.
Finally, the messages must meet certain requirements. The messages must contain the sender’s business name, a mailing address, and either a phone number, email, or website address. The messages must also contain an unsubscribe mechanism that must make it easy for individuals to unsubscribe at no additional cost. The unsubscribe requests must be processed within 10 business days.
The Canadian law also has requirements regulating the installation of apps. Before installing an app, the app owner must receive consent and also disclose the general nature of the app and the name/contact info for the app owner. In addition, the app owner may also need to provide additional information if the app has certain functionality, such as if the app collects data.
II. Comparison of U.S. Laws and the CASL
While the requirements for the two laws are somewhat similar, there are some differences between the U.S. laws and the CASL.
First, the main difference is the requirement that the sender must have obtained the recipient’s consent prior to sending the commercial email. While there is a long period for senders who have a relationship with recipients prior to July 1st to obtain express consent, unlike the U.S. law it will be hard for senders to reach consumers with whom they do not have a relationship prior to the implementation date.
Second, many of the requirements for the message between the two laws are very similar. Both laws require identifying information about the sender of the email, including a physical address. Both laws require a working opt-out in the emails, and opt-out requests must be honored within 10 days.
Third, the CASL also has a broader scope the U.S. law, covering all types of electronic messages. In the U.S., the CAN-SPAM law covers emails while text messages are covered under the Telephone Consumer Protection Act.
Fourth, the CASL contains a private right of action for senders, allowing them to bring an action for $200 (Canadian dollars) per violation. This provision won’t take effect until July 2017, but could be used against senders of commercial emails who fail to comply with the law and allege multiple violations. In addition, the government can seek up to CA$10m per violation.
Finally, the CASL contains some additions that are helpful to both real estate professionals and REALTOR® associations. The CASL has a carve out allowing a one-time exception for sending solicitation in response to a referral, which should help real estate professionals reach out to a potential new clients. The CASL also contains a specific exception for associations to send messages to their members under the implied consent provision of the law.
Senders of commercial electronic messages to Canada need to be aware of the new requirements that took effect on July 1, 2014. While there are many similarities between the two laws, the Canadian law requires that you must have implied or express consent from the recipient prior to sending the message.