Strong enforcement needed for Canada’s Do Not Call List to work

Without effective enforcement, Canada’s Do Not Call program – the countrywide initiative to eliminate pesky telemarketing calls – could turn out to be nothing more than a paper tiger, caution telecom industry and consumer experts.

They also emphasize the need for a reliable revenue stream so the fledgling initiative doesn’t end up like its American counterpart, which is in constant need of government bailouts.

Canada’s National Do Not Call List (NDCL) is set to go live on September 30 – nearly four years since it was first introduced in Parliament.

The list was established by the Canadian Radio-Television and Telecommunications Commission (CRTC) following the passage of a bill in 2005 calling for the creation of system that protected consumer privacy and restricted unsolicited telemarketing calls.

It was only last December that the CRTC finally signed a contract with Bell Canada, awarding the telecommunications carrier the right to manage the list.

For more info on the NDCL click here.

A key challenge to the program was the dearth of organizations willing to absorb the responsibility and financial risks of managing the list.

The only revenues available to the appointed NDCL manager will come from telemarketers – businesses and individuals – who subscribe to the list.

Financial viability and effective management go hand-in-hand, says an advocacy organization.

“We’re happy to hear the NDCL is getting off the ground. But its success will depend on the enforcement and implementation regime,” said John Lawford, research analyst and counsel for the Ottawa-based Public Interest Advocacy Centre (PIAC).

“I hope the managers make a decent effort at enforcement, or else less [scrupulous] telemarketers will take their chances at breaking the law and the NDCL could end up as a paper tiger.”

Lawford said effective enforcement and implementation hinges on adequate funds to run the program.

In fact, lack of funds was a problem with the DNC list in the U.S., which became operational in 2003, he said.

South of the border, AT&T was given the contract to run the Do Not Call registry.

“They are always short of money and had to ask for funds from Congress throughout their four to five years of operation,” noted Lawford.

A CRTC official has acknowledged the financial risks involved may have deterred many organizations from seeking a chance to manage the list.

“Because the DNC list manager would have to earn revenues solely from telemarketers subscribing to the registry, we received a significantly lower number of bids compared to other government contracts,” said Nancy Webster Cole, senior manager for telemarketing regulation at the CTRC.

This is also the reason, she said, why the CRTC will itself be handling investigation of consumer complaints in the interim.

“The CRTC has the ability to delegate the investigation of complaints but there were no bidders when our RFP (request for proposal) closed on March 25.”

However, Webster Cole does not foresee Bell Canada running into any revenue problems.

“Unlike in the U.S., where the list manager remits registration fees to the government and then gets paid by the government, Bell will not be paid by the government. The company gets to keep the registration revenues.”

Bell was awarded the contract to run the DNC list because it accepted this arrangement, exhibited the experience, and had the database necessary to manage the list, she said.

An Ontario-based telecom industry analyst sees no conflict of interest issues in Bell Canada being awarded the contract.

“They are actually pretty good at handling rules concerning competing groups and their extensive database and network makes them a good choice,” said Andy Woyzbun, lead analyst at research firm Info-Tech Research Group Inc. in London, Ont.

He said one admin headache facing Bell Canada would be how to handle the avalanche of consumers scrambling to get on the list.

To provide some perspective on possible traffic — nearly 62 million people signed on with the U.S. DNC list when it opened in 2003. By the registry’s second year, that number ballooned to 92 million.

Woyzbun also foresees, numerous consumer complaints arising from the list’s exclusion provision that exempts political parties and candidates, registered charities, surveys and pollsters, general circulation newspapers and companies with whom the consumer has an existing business relationship.

“This means if I have an account with a bank, even with the list I will still get hammered with calls for insurance, credit cards or other products that that bank is hawking. Well those are the sorts of calls I’m getting now.”

The exemptions actually allow a majority of current telemarketing calls to circumvent the DNC list, says Lawford of PIA.

He said a previous study indicates that 44 per cent of unsolicited calls come from charities, about 20 per cent are made by political parties and candidates, and the remaining 11 per cent are split among pollsters, newspapers and businesses that handle transactions with the consumer.

“The NDCL got rid of at least 25 per cent of the telemarketing calls. I guess that’s better than nothing.”

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