Ontario call centres distressed over privacy law

One Ontario call centre says it may be forced to hang up the phone on its operations if planned provincial privacy legislation comes into effect next year.

The legislation would transform the way call centres –– particularly outbound and telemarketing operations –– function

by only allowing them to contact individuals who have consented to being called.

“”If this is introduced, we will have to leave Ontario or go out of business. I know that other companies will leave too,”” said Richard McLaughlin, president of St. Catherines, Ont.-based NuComm International which operates four call centres and employs approximately 2,500 people in the province.

“”Individuals do need to be properly protected but, as it currently stands, this legislation will be overly crippling for businesses like ours that rely on access to information,”” added McLaughlin.

The proposed Privacy of Personal Information Act is Ontario’s response to the federal Personal Information Protection and Electronic Documents Act, which is due to come into effect in January 2004. Provincial governments are allowed to bypass the federal act if they introduce their own legislation that meets or surpasses it.

Ontario has responded by drafting a law that would be the most far-reaching of its kind anywhere in North America, and it could be enacted as early as January 2003. Broader in scope than its federal counterpart, the proposed Ontario legislation applies to all organizations, and places a greater emphasis on the express consent of individuals in the use of personal information about them.

For Ontario call centres, this means individuals will have to consent to be on a contact list before they can be called as part of a marketing initiative. Companies would not be able to trade lists unless individuals give blanket consent for them to do so. The rules would also apply retroactively, with companies obliged to seek consent from individuals on existing contact lists.

Michael Power, a partner in the Ontario office of Gowling, Lafleur Henderson LLP, is a privacy law expert who helped develop the federal legislation. He says call centres in Ontario will have to change the way they do business if the provincial act is fully implemented.

“”This is a plan for giving individuals greater control over the system. It will certainly lead to less trading in lists and it means call centres will have to pay much more attention to the idea of individual privacy in their operations,”” said Power.

While some within the industry accept the idea of privacy protection, there are concerns that the Ontario proposals will put them at a serious disadvantage when competing with call centres in other regions.

“”Under the terms of this legislation, any information processed by a call centre here will be subject to the same rules of consent, whether the person being called is in Ontario, B.C. or the U.S. This means Ontario call centres will not be able to process U.S customers without their consent but U.S. call centres will be able to call individuals in Ontario without the same restriction,”” said John Gustavson, president and CEO of the Canadian Marketing Association, the country’s largest marketing industry lobby group.

Recommending that Ontario call centres begin immediately pressuring local politicians on the issue, Gustavson predicts that outbound and telemarketing operations in the province will not survive in their current form, and that Ontario will certainly lose future call centre business if the legislation is fully enacted.

According to privacy advocates, though, the call centre sector is exaggerating its case against the proposals. Richard Rosenberg, vice-president of Electronic Frontier Canada, a national group that promotes the rights of individuals over personalized electronic information, rejects the idea that call centres will leave Ontario en masse.

“”I don’t think so. Obtaining explicit permission should just be seem as a cost of doing business,”” said Rosenberg, who is also a professor in the department of computer science at the University of British Columbia.

He predicts the rules would at most be an inconvenience to Ontario call centres whose main concern, he believes, is the cost associated with compliance.

“”Clearly most companies do not want to go through the additional expense and effort to obtain explicit permission from customers to use supplied information in any way they choose,”” said Rosenberg.

Comment: info@itbusiness.ca

John Lee is a freelance journalist based in Vancouver. His last article for ITBusiness.ca was One to Watch: Gavagai Technology

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