Life not so good for GoodLife Fitness: CRTC levies $300,000 penalty for "robocalls"

24 août 2011

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According to Isaac Asimov’s First Law of Robotics, a robot may not injure a human being.  According to the CRTC’s Unsolicited Telecommunications Rules, it must also not make telemarketing calls without explicit consent.

As part of its stated commitment to crack down on telemarketing violations, the CRTC  announced on August 23, 2011, that GoodLife Fitness Centres has paid a penalty of $300,000 as part of a settlement with the CRTC over violations of telemarketing rules.

Part IV of the Unsolicited Telecommunications Rules prohibit the use of Automatic Dialing-Announcing Devices (ADADs) for solicitation purposes, unless a consumer has provided express consent to receive telemarketing calls via ADAD technology.  ADADs are defined to mean automatic equipment with the capability of storing or producing numbers, used alone or in conjunction with other equipment to convey a pre-recorded or synthesized voice message to a telecommunications number.

An investigation by the CRTC found that between May 1, 2010 and December 15, 2010 GoodLife violated the ADAD rule 60 times by using “robocalls” to notify customers of new club openings and invite them to grand opening events.  In addition to an administrative penalty of $5000 per violation, Goodlife’s negotiated settlement with the CRTC will require it to issue a public apology and help organize a business event with the CRTC for the purpose of fostering compliance with telemarketing rules.  

When considering the use of robocall technology, organizations should be aware that such calls are treated distinctly from live voice telemarketing, which is generally permitted (subject to certain restrictions), unless the call recipient is on the National Do Not Call List (DNCL).  By contrast, the use of ADADs for solicitation is generally prohibited, unless the consumer explicitly consents.  The ADAD rules also apply whether or not a call recipient is on the DNCL, and apply to a number of types of calls that are generally not subject to the DNCL, such as telemarketing calls by charities.

It is also worth noting that “solicitation” is defined broadly to include any attempt to sell or promote a product or service, or any attempt to solicit money or donations, including on behalf of a charity.  Even where the communication is not for solicitation purposes the rules impose further restraints on ADADs, such as a prohibition on sequential dialing and time-of-day restrictions on calls.          

Since 2006, when amendments to the Telecommunications Act came into force, giving the CRTC the power to impose Administrative Monetary Penalties, telemarketing investigations have resulted in penalties of $2.84 million (of which $740,000 has been paid, under settlement terms, to post-secondary institutions), with a number of significant and high profile fines in the past 10 months. The Act allows for penalties of up to $15,000 for each contravention, and each violation that continues on more than one day constitutes a separate violation. 

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