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CASL Private Right of Action Delayed (Indefinitely)

The Government of Canada has repealed the coming into force of the private right of action for violations of Canada’s Anti-Spam Legislation (CASL). The Government has listened to concerns raised by businesses, charities and the not-for-profit sector about the implementation of CASL, which would have permitted individuals to sue for violations of the law.

The Government has also acknowledged that “businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation” and has asked a Parliamentary Committee to review the legislation.

Read the Press Release here.

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CASL Private Right of Action Delayed (Indefinitely)

A Cautionary Tale Regarding Consent and In-Store Tablets

The Office of the Privacy Commissioner (OPC) recently released a case summary with implications for retailers attempting to obtain consent for privacy-compliance or anti-spam compliance purposes.

Consistent with guidance by the Canadian Radio-television Telecommunications Commission (CRTC) with respect to Canada’s Anti-Spam Legislation, the OPC is taking a harder line with respect to the business records that an organization must retain in order to establish that an individual gave consent. The bottom-line is that the practice of obtaining consent by either having the individual or the salesperson check a box is vulnerable to challenge. Organizations should only use methods of obtaining consent that involve corroborative evidence.

Background

The complaint arose out of a dispute with respect to whether an individual had applied for a co-branded credit card with a retailer. While shopping in a retail store, the complainant was approached to join a loyalty program. The individual provided the salesperson with his driver’s licence as part of the registration.

Later, the individual received a credit card and learned that a credit check had been conducted on him. After obtaining access to the information held by the bank that provided the credit card, the complainant discovered that much of the information on the application was inaccurate and asserted that he had not provided that information to the salesperson. He also argued that he did not check the box on the tablet to permit a credit check.

The OPC concluded that the bank could not establish that it had obtained consent and that the information collected from the complainant was accurate. There was no evidence that the complainant ever saw the tablet screen, provided the information in the application, understood that the information would be used for a credit check or that the individual actually clicked the consent box on the tablet.

No Recognition of Canada Evidence Act

Certainly, the circumstances of this case were suspicious. However, bad facts can make for bad legal interpretations. That seems to be the case here. The OPC appears to believe that organizations must retain independent proof that consent has been obtained. This is similar to guidance form the CRTC’s guidance that oral consent to receive commercial electronic messages must be backed up with an audio recording or third party verification.

This guidance fails to directly engage with the laws of evidence within which both the Personal Information Protection and Electronic Documents Act and Canada’s Anti-Spam Legislation exist.  The Canada Evidence Act specifically contemplates that the business records, including electronic business records, are admissible for the proof of what is recorded in them. While other evidence may raise concerns regarding their accuracy or veracity, as in the case before the OPC, they are not inherently inadequate as the OPC and CRTC seem to suggest. In an informal administrative process such as the one before the OPC, the OPC may be free to ignore the law of evidence. However, this would not be the case before the Federal Court.

The real issue should have been that the organization was unable to establish that it audited compliance of the salespersons such as through secret shoppers or that the organization confirmed the individual’s consent by sending the individual a copy of the application once completed.

Conclusion

Be forewarned: organizations should have some means of corroborating their records when obtaining oral consent from individuals in retail stores in order to avoid problems with the OPC and the CRTC. To access the OPC’s decision, click here: PIPEDA Case Summary 2016-12.

A Cautionary Tale Regarding Consent and In-Store Tablets

Private Right of Action under CASL coming July 2017

Canada’s Anti-Spam Law came into force on July 1, 2014.  Since then, all eyes have been on the Canadian Radio-television and Telecommunications Commission (CRTC) for decisions concerning CASL violations.  In the cases made public to date, monetary penalties or settlement payments have ranged from $48,000 to $1.1 million.  Canadian and foreign companies have learned some things in the past two years about how CASL applies to their business, and many have taken steps to put in place policies and procedures to avoid violations.

Whatever steps you have taken to date, 2017 will be the time to revisit CASL compliance

On July 1, 2017, the private right of action (PRA) comes into force under CASL.  An individual or organization who is affected by a contravention may litigate to enforce the new private rights directly.  While CASL does not expressly provide for class actions, it is broadly expected that such actions will be launched to permit large numbers of applicants (for example, the recipients of alleged spam) to pursue compensation as a group.

Where the court finds a violation, it may order not only compensation for the applicant’s damages, but also monetary payments up to the following amounts:

  • for sending commercial electronic messages contrary to CASL – $200 per contravention, to a maximum of $1 million for each day that the conduct occurred
  • for altering the transmission data of a commercial electronic message – a maximum of $1 million for each day that the conduct occurred
  • for installing apps or other computer programs contrary to CASL – a maximum of $1 million for each day that the conduct occurred
  • for scraping, generating or otherwise accessing electronic addresses contrary to PIPEDA – a maximum of $1 million for each day that the conduct occurred
  • for sending commercial electronic messages with false or misleading information, including sender, locator or subject matter information, contrary to the Competition Act – $200 per contravention, to a maximum of $1 million for each day that the conduct occurred

When the court sets the amount to be paid, it must consider the purpose of the payment order – which “is to promote compliance…and not to punish”, the nature and scope of the violation, the history of compliance, any financial benefit or compensation from the conduct, ability to pay, and “any other relevant factor”.

CASL also provides for extended liability.  Directors, officers, agents or mandataries of a corporation may be liable if they directed, authorized, assented to or participated in the contravention.  Where an employee’s conduct in the course of his or her employment breaches CASL, the employer may be vicariously liable.

Revisiting CASL

CASL provides that where a person establishes that they exercised due diligence to prevent a violation, they cannot be found to have contravened CASL.  Despite this provision, a number of well-meaning businesses have been found offside CASL’s provisions, have made significant penalty or settlement payments, and in some cases have received negative media coverage for their failure to meet CASL requirements.

In July 2017, the risk exposure will increase.  Now is the time to revisit your CASL compliance.

  1. Discuss with your Board and Senior Management team why you need to revisit CASL in 2017.
  2. Make sure that you have a CASL Compliance Policy and Procedure that covers your operations, and that is easy for employees to understand and use.
  3. Ensure that existing and new employees have access to – and receive appropriate training in – the Policy and Procedure.
  4. Conduct an audit under the Compliance Policy and Procedure, including how consent is obtained and documented; whether unsubscribe requests are fulfilled quickly; whether CASL-compliant message templates are consistently used; how complaints are addressed (etc.).
  5. Consider whether you need to check in with service providers (to send messages or install apps or other computer programs) about their CASL compliance.
  6. Consider whether service provider contracts include the appropriate clauses to address CASL compliance, liability, and indemnification.

See also:

Lessons Learned: E-Learning Company Faces $50K Spam Fine

CRTC Enforcement Advisory – Records to Show Consent

Privacy Law and Anti-Spam – Guidance from the Office of the Privacy Commissioner

Canada’s Anti-Spam Law: Not just for Canadians

CASL Applies to Software January 15 2015

New CASL Compliance and Enforcement Guidelines

 

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Private Right of Action under CASL coming July 2017

HHS Issues Warning About Phishing Campaign Disguised As Official Communication

As part of its efforts to assess compliance with the HIPAA Privacy, Security and Breach Notification Rules, the US Department of Health and Human Services (HHS) Office for Civil Rights (OCR) engages in audits of covered entities and their business associates.

On November 28, 2016, the OCR issued an alert warning covered entities about a phishing e-mail that is being circulated on mock HHS Departmental letterhead under the signature of OCR’s Director, Jocelyn Samuels.  The e-mail purportedly prompts the receiver to click a link regarding possible inclusion in the HIPPA Privacy, Security, and Breach Rules and Audit Program, and directs the recipient to a non-governmental website.  The phishing e-mail originates from the e-mail address OSOCRAudit@hhs-gov.us and directs individuals to http://www.hhs-gov.us.  This is a slight difference from the official e-mail address for the HIPAA audit program, OSOCRAudit@hhs.gov, and the official HHS website http://www.hhs.gov.

The OCR advises covered entities and their business associates to alert employees of this issue and take note that official communications regarding the HIPAA audit program are to be sent to selected auditees from the official e-mail address OSOCRAudit@hhs.gov.

A copy of the OCR alert can be found here.

If you or one of your entities has received this phishing e-mail, the Dentons Privacy and Cybersecurity Law Group is available to help you navigate next steps.

HHS Issues Warning About Phishing Campaign Disguised As Official Communication

FTC Announces New Guidance on Ransomware

On November 10, 2016, the U.S. Federal Trade Commission (FTC) released new guidance for businesses and consumers on the impact of, and how to respond to ransomware.  Ransomware is a form of malicious software that infiltrates computer systems or networks and uses tools like encryption to deny access or hold data hostage until the victim pays a ransom.  Ransomware incidents have increased over the past year, including a number of high-profile attacks on health care organizations.

Business Guidance

For businesses, the FTC released Ransomware – A closer look with a companion video Defend against Ransomware.  A copy of both can be found here.

According to the FTC, if your business holds consumers’ sensitive information “you should be concerned about the threat of ransomware.”  The FTC notes it can impose “serious economic costs on businesses because it can disrupt operations or even shut down a business entirely.”

In order to defend against ransomware attacks, the FTC recommends businesses invest in prevention through:

  • Training and education: Implement education and awareness programs to train employees to exercise caution online and avoid phishing attacks.
  • Cyber hygiene:  Practice good security by implementing basic cyber hygiene principles (including updating software, and implementing new procedures for users).
  • Backups:  Backup data early and often.
  • Planning:  Plan for an attack.  Develop and test incident response and business continuity plans.

For those businesses hit with a ransomware attack, the FTC recommends organizations take the following steps:

  • Implement the continuity plan:  Have a tested incident response and business continuity plan in place.
  • Contact law enforcement:  Immediately contact law enforcement, such as a local FBI field office, if an attack is discovered.
  • Contain the attack:  Keep ransomware from spreading to networked drives by disconnecting the infected device from the network.

Consumer Guidance

For consumers, the FTC released How to defend against ransomware.  A copy of this guidance can be found here.  The FTC recommends consumers take the following steps to protect against ransomware:

  • Update your software:  Use anti-virus software and keep it up to date.  Set your operating system, web browser and security software to update automatically, and on mobile devices do it manually.
  • Think twice before clicking on links or downloading attachments or applications:  You can get ransomware from visiting a compromised site or through malicious online ads.
  • Back up files:  Back up files whenever possible, and make it part of your routine.

If you are a victim of a ransomware attack, the FTC recommends:

  • Disconnecting the infected devices from the network;
  • Restoring the infected device where possible; and
  • Contacting law enforcement.

Next Steps

If you or your organization becomes a victim of ransomware, or you are interested in developing a comprehensive prevention plan, Dentons’ Privacy and Cybersecurity Group is ready to help.

FTC Announces New Guidance on Ransomware