Small firms say Do Not Call List rules ‘unfair and confusing’

Automotive sales and services operator Ilya Pinassi is pretty sure that his publicly-listed citation for breaking federal unsolicited telecommunications rules is all a misunderstanding.

It’s really more about his service technicians refusing an unreasonable customer request than it was about any calls his staff made.  

The VP of operations at Parkway Motors Hamilton Ltd. runs three Hamilton, Ont.-based car dealerships and full-service garages. When the Canadian Radio-television and Telecommunications Commission (CRTC) came knocking, claiming Parkway Motors had violated Do Not Call List rules by not adding a customer’s name to their in-house list within 31 days of the request, Pinassi denied that call had ever been made.

“The onus was immediately put on our organization to prove this was not the case,” he says. “It was totally baseless and unfair, we had already had the client on the list.”

Parkway Motors only calls its clients to remind them of pre-arranged appointments for car tune-ups, Pinassi says. It keeps an active database indicating what customers will accept calls, and which will not. Also, Pinassi believes this particular complainant – named by the CRTC in a letter to Parkway Motors – had ulterior motives.

Related Story: Permission-based marketing helps firms deal with do not call list

“I think he had a negative experience and this was his way to deal with it,” he says. “He wanted something done under warranty that was well outside of warranty.” 

Despite Pinassi’s refuting the complaint, Parkway Motors was cited by the CRTC and is now listed publicly on the commission’s telemarketing enforcement Web site. The firm didn’t have to pay a fine.

‘All bark and no bite’

Parkway Motors is just one of a long list of small businesses cited by the CRTC for violating Canada’s Unsolicited Telecommunications Rules, implemented in September 2008 with a National Do Not Call List (DNCL). The businesses listed include home and lawn services, financial services, newspapers, gyms, and more. Though the list of citations is long, the fines issued to small businesses are almost non-existant.

The CRTC has collected $1.8 million in penalties as the enforcer of the list, and jostled another $740,000 for post-secondary institutions out of the pockets of offenders. But all of that money comes almost entirely from payments made by Canada’s incumbent telecommunications carriers – Bell Canada ($1.3 million), and more recently Rogers Communications ($275,000). Plus a $500,000 fine to Xentel DM Inc.

Still, the citations have left the small firms that ITBusiness.ca spoke with feeling fed-up and unfairly treated. Some businesses weren’t even aware they’d received a citation, while others complain about the CRTC’s heavy-handed approach or technical issues related to voice over Internet protocol (VoIP) phone lines. Most agree the subscription fees to the national list are too expensive, and one expert describes the whole system as being flawed from the start.

The Do Not Call List is a national effort by the CRTC to allow Canadians who do not wish to receive unsolicited telemarketing calls to register their phone numbers. BCE Inc.’s Bell Canada division operates the list and sets the subscription rates, and telemarketers are required to at least register with the system. In many cases, telemarketers are required to subscribe to the list as well.

The CRTC’s goal is to foster compliance with telecommunication rules, says Andrea Rosen, the chief telecommunications enforcement officer at the CRTC. There are many ways to get that done – issue a violation and fine in the more serious offenses, or issue the less-formal citation to the offender in a less serious matter.

As of February, more than 9.3 million phone numbers were registered with the DNCL. The CRTC has dealt with 400,000 complaints since the list was created, Rosen says. For those firms that receive 30 complaints or less, a citation might be issued with no penalty.

“It’s on the record and by virtue of informing the public about it, we can make consumers aware of companies that are calling that should not be calling,” she says. “We don’t issue citations for many violations.”

Twenty-eight smaller offenders have paid a total of $195,000 in penalties to the CRTC. The largest fine that a small company has paid to date is $42,000.

Concerns about enforcement of DNCL rules have existed from the beginning, says Michael Geist, an Internet law professor at the University of Ottawa and founder of iOptOut.ca – a DNCL alternative that is currently offline. The problem stems from too many exceptions being allowed – charities, pollsters, politicians, companies with an existing business relationship and newspapers can all continue to call numbers present on the national list.

“Frankly, for many small businesses out there that may find themselves pushing the envelope or even violate the law, the CRTC just doesn’t have the resources” to enforce the rules, Geist says. “If it’s all bark and no bite, that will further undermine the effectiveness of the system.”

‘Holy cow, just for a phone call’

Lethbridge, Alberta-based Paradise Canyon Management Ltd. administrator Gary Johnson didn’t appreciate the tone of the letter his company received from the CRTC. The firm was cited for failing to process a request to be placed on its in-house DNCL, but the CRTC enforcer threatened worse.

“They scare the heck out of you. They talk about tens of thousands of dollars worth of fines if you mess up,” Johnson says. “You have to be careful, because it’s pretty brutal if you make a mistake what they can do to you.”

Paradise Canyon does subscribe to the national list, taking the quarterly payment option for select area codes. The company targets its marketing activities in Alberta, Saskatchewan and B.C.

Bell charges $533 per area code for a three months subscription to the list. A subscription can be as expensive as $22,425 for one year of access to the entire list, or as low as 75 cents per number queried. But Johnson feels the firm pays too much for its subscription.

A CRTC table showing current subscription rates for the DNCL.

“It’s just another government bureaucracy they’ve created to make money,” he says. “Every time there’s a new area code, they make more money.”

The list has failed Paradise Canyon before, Johnson adds. One person they called insisted he was on the national list, even though the number wasn’t found there. “He was going to a lawyer to sue us, holy cow, just for a phone call.”  

Bell sets the cost for the subscriptions, according to CRTC’s Rosen. The carrier doesn’t get paid by the government to manage the list, so it relies entirely on subscription fees to run the operation – and Bell is allowed to make a “small profit” on the list. But Rosen couldn’t say how much that profit is limited since it is confidential information; “It’s probably a reasonable profit,” she says.

The rates are reasonable, Rosen says, since they are similar to the rates other countries charge to run their lists and there is a proportional system that allows small businesses to buy only what they need, and when they need it.

“If you’re doing a marketing campaign for the month of September, you can just buy it for the month of September,” she says.

The list does have value beyond simple compliance with the law, Geist says. It informs telemarketers of those who won’t be receptive to unsolicited phone calls.

“The Do Not Call List provides a way for people to proactively say they don’t want to be called,” he says. “They really don’t like it, and that’s valuable information from the perspective of a telemarketer.”

Still, smaller business should speak up and ask for their costs to be covered by the government, Geist adds. ““In the U.S. the government sets up the system and the government pays for it to run. It’s highly unusual to set up this system and then leave the whole haul to the private sector.”

Other businesses that feel the same frustration as Paradise Canyon simply choose not to subscribe to the national list at all. That’s the choice of Parkway Motors – it’s just too costly, Pinassi says. “I find it abhorant. When it’s a federal requirement that you have a DNCL, then you shouldn’t have to pay to get it.”

Since Parkway Motors only makes phone calls to remind its customers of pre-arranged appointments, it is exempt from subscribing to the list. But who’s exempt from subscribing to the list and who’s not isn’t always so clear cut. That’s what Eran Hurvitz discovered when his call centre had a dispute with a client.

Read Broken Telephone Part 2.

Brian Jackson is a Senior Writer at ITBusiness.ca. Follow him on Twitter, read his blog, and check out the IT Business Facebook Page.