PIAC News Release

Privacy Commissioner finds businesses in breach of law;Consumer groups declare victory and demand compliance

In a slew of findings released today, the Privacy Commissioner of Canada upheld the view of consumer advocates that consumers should be provided, up front, with clear, detailed information on how their personal information will be used by businesses. He also found that consumers should be given a convenient, inexpensive means of opting out of secondary marketing purposes.
George Radwanski found that companies are violating the federal data protection law by failing to obtain meaningful consent from consumers to secondary uses of their personal information.
In October 2001, the Public Interest Advocacy Centre (PIAC) lodged complaints against a number of large companies, alleging that they were in breach of the legal requirement for informed consent. In some cases (e.g., Bell Canada), the Commissioner found that the company did not use or share customer data with affiliates. One company, Scotiabank, was found to have an “exemplary” policy of personally bringing optional secondary purposes to the attention of customers, and guiding customers through the opt-out process.
However, the Commissioner had harsh words for MBNA Canada’s practices regarding use of customer information for secondary purposes, and found that Bell Mobility, Bell ExpressVu, and Loyalty Management Group (operating the AIR MILES program) all ran afoul of the federal law.
“This sends an important message to the marketplace”, said Philippa Lawson, the PIAC lawyer who lodged the complaints last year. “Businesses can’t simply deem customer consent to the use of personal information for secondary purposes, on the basis of hidden contract terms or website postings. In order to meet legal standards, consent must be obtained in a manner that ensures that it is conscious, informed, and intentional.”
“The Commissioner has made it clear that this means bringing the matter to the attention of the individual customer during the application process, rather than relying upon generally available policy documents. It means stating the purposes in clear, plain language and in sufficient detail for the ordinary consumer to appreciate what it is they are consenting to. And finally, it means giving consumers an easy, inexpensive way to opt-out of secondary purposes”, she added.
The Commissioner further stated, in his findings on Bell Mobility, that “where an organization intends to disclose personal information that the individual is likely to consider sensitive, such as credit records and complaint records”, the individual should “be consulted directly and positively”, though “positive or opt-in consent rather than the negative option”.
“These findings reflect the clearly expressed preferences of Canadians”, said Ms. Lawson. In a nation-wide survey conducted by EKOS Research Associates Inc. last year, 82% of Canadians said that businesses should obtain their permission before using their information for further marketing purposes. 69% do not consider approve of opt-out approaches to consent for such purposes. If opt-out is nevertheless used, 88% said that the opt-out process should be clear and easy for them to execute.
“It’s time for the marketplace to wake up”, said Ms. Lawson. “Consumers are demanding control over their personal information, and the law supports their demand. Companies who think they can just assume customer consent to secondary uses of their personal information should think again. Consumers value their privacy, and expect companies to respect it.”
See http://www.privcom.gc.ca/cf-dc/index2_e.asp for the Commissioner’s Summary Findings.
CONTACT: Philippa Lawson, PIAC tel: 613-562-4002 x.24 (613)282-4673 (cell)

Why Phone Service is Deteriorating for Most Consumers

For Whom Bell Tolls: Why Phone Service is Deteriorating

Philippa Lawson
Senior Counsel
Public Interest Advocacy Centre
Over the last few decades Canadians have enjoyed superior telephone service. We have become accustomed to phone service that is available almost everywhere we can travel in this great country, that is largely reliable and of high quality (with exceptions for some remote communities), that is priced affordably, and that is delivered with enviable customer service. This was all made possible through a system of regulated monopoly: we had no choice of service provider, and the one we had was constrained not by market forces but by a government-appointed regulator.
During the 1980s, pressure built from the business community to reduce long distance rates, which were priced to recover most of the cost of wires to each home. In the early 1990s, the Canadian Radio-Television and Telecommunications Commission (CRTC) responded to that pressure by opening the long distance market up to competition. A few years later, the local market was also opened to competition. In both cases, the CRTC chose an “asymmetric” form of regulation, applying very few rules to new entrants, but maintaining a regulatory handle on incumbents.
However, once enough competition develops in a given market, the CRTC is required, by statute, to forbear from regulation. In 1997, long distance rates were largely de-regulated on the basis that competition was sufficient to protect the interests of users. In 1998, the Commission opened the pay phone market to competition, requiring all providers to comply with a set of consumer safeguards, and continuing to regulate the pay phone rates charged by incumbent phone companies.
Wireless phone service and Internet service also developed over this period. In both cases, the CRTC determined that competition was sufficient to protect users from poor quality or excessive rates.
Ten years after the introduction of competition in phone service, where are we? What has happened to rates? to service availability and choice? to service quality? to customer service? PIAC is currently studying changes over the past decade and expects to publish its findings by early 2003. While this research and analysis continues, some things have become clear.

Long distance rates have plummeted; local rates have soared

Heavy users of long distance service, and those making overseas calls, have clearly benefited from rate changes over the past decade. However, those who make little use of long distance (disproportionately elderly and low income) are paying more for phone service. A large proportion – possibly half – of Canadians are paying more for the same package of local and toll services now than they did in 1992.

New service options are available

Competition is about choice. Consumers definitely have choice in the long distance market, but not much in the local market, except in terms of the increasing array of service features and bundles. Wireless service and Internet have also brought important new benefits to consumers over the past decade. But all this choice comes at the price of simplicity.

Marketing is everything

With competition has come a shift of company resources from customer service to marketing. In their quest for higher profits, companies are focusing on capturing customers by offering great deals (or at least great-sounding deals). But they are not spending nearly as much effort on serving those customers. In fact, customer service seems to have become just one more avenue for marketing: try calling a telephone company customer service line with an inquiry, and see how many promotional messages you have to listen to before you can get your question answered. You may have forgotten the reason you called by that point! “Customer service representatives” seem to have been replaced by recorded messages and “sales agents” who are required to pitch high-margin services to you at every opportunity.
Even notices of rate increases seem to be written by the marketing department, such that even those few customers who happen to notice the notice (which usually comes either in the form of a small print statement on the bill, or a bill insert combined with various glossy marketing brochures) will not generally appreciate that their rates are about to increase. It’s amazing how a good marketer can turn rags into riches!
More disturbing, however, is the apparently deliberate strategy on the part of companies in competitive markets to present consumers with such an array of options, advertised and unadvertised, and so many terms and conditions, that even the most intelligent consumer cannot make out which plan is in their best interest. Whether it is because of hidden charges, lack of awareness of a cheaper alternative, or inability to compare plans, many – possibly most – customers are paying more than they should be for telephone service. As one marketing executive was overheard saying: “confusion equals margin”.

Customer service is suffering

Despite continued regulatory oversight of incumbent phone company quality of service (e.g., time taken to answer your call, to provide a hook-up, or to repair a problem), levels of service are remarkably poor across both incumbents and competitors.
It is often difficult to get hold of a customer service representative: in our national survey of phone companies, we frequently encountered long waits and busy signals. In the case of some unregulated companies, we could not even find an option for a real person! More than once, we were hung up on or told to “hang up and call back later”.
When reached, customer service representatives were often unable to provide a clear answer to our straightforward questions, whether about basic toll rates or rental set charges. In such cases, the representatives were often condescending and sometimes rude. We were frequently transferred from one agent to another, without ever having our question answered, and were refused access to the supervisor even when our inquiries went unanswered.
When answers were provided, they were all-too-frequently wrong. We were assured, for example, that all of the company’s services were regulated, that an invalid rate was valid, that the best long distance deal for a given customer was Plan X when the customer would have been better off with basic toll rates, and that the monthly $1.25 “Network Fee” voluntarily applied to unregulated plans by most companies was imposed by the CRTC. None of this is true.
When inquiring about long distance plans, one agent told us that the information you get depends on the customer service representative! Unfortunately, this advice corresponded with our own experience.
Directory assistance used to be a reliable service. Whether over the phone or online, it is now fraught with inaccuracies and incompleteness: a small survey we did a few years ago suggested an error rate of 24% with phone inquiries! This, despite the fact (or because?) we now have to pay 75¢ to $1 for each call to directory assistance, even if our inquiries go unanswered. Anecdotal information suggests that the situation has not improved.
Telephone companies are saving money by getting more listings on each page of the directory. Elderly people find that the font size in telephone directories is now so small that they have trouble reading it.
A presumably well-intentioned effort to improve the Blue Pages in the Bell Canada directories resulted in a much less comprehensive, and thus less useful, directory of government departments and agencies.
And what has pay phone competition brought us? Above all, less service. Telephone companies are removing non-compensatory pay phones at an alarming rate. And who can blame them? In a competitive market, you can’t force companies to provide service at a loss. We are now faced with a Hobson’s choice of higher pay phone rates or even fewer pay phone locations.

Mistakes go unnoticed

In the focus on high margin customers and competitive markets, phone companies pay less attention to ensuring that all is right with the mass of ordinary customers. In the effort to improve profits, customers are often steered toward rate plans that cost them more than necessary. In the effort to improve productivity, corners are cut in ways that sometimes result in errors – errors that seem usually to benefit the company.
But, when customer service reps tell you that the best rate plan for you is X (when it is instead Y), you don’t know what you are missing. When the operator tells you that the in-service number you are seeking does not exist, you assume that this is correct. When the company assures you that its $5.30/mo. charge for an old rotary dial rental phone set (which is worth less than $5 itself) is valid, you accept their word. But in all of these cases (recent examples), the information was wrong. The company benefited from providing the wrong information, and the unwitting customer paid.
If the mistake is noticed and if it involves a misrepresentation, or a contractual or regulatory breach, consumers can seek redress from the CRTC or through the courts (e.g., via class actions). But this isn’t much help if you aren’t aware of the error in the first place.

Charges are hidden

Some phone companies have decided that their customers are better off not seeing what they are paying for on each monthly bill. Instead, these companies provide an itemized local service bill only once/year, or when changes are made to the account (toll charges are always itemized). The regular monthly bill simply shows a total charge for “monthly services” or the like; it does not itemize each optional local service the customer is paying for. As a result, many people end up paying for services they neither want nor need. Guess who benefits?
Other companies seeking a way to increase their revenues simply impose additional monthly fees for phantom services such as “Network”, “Administration” or “System Upgrades”, rather than increasing the advertised rate for the services they offer. Thus, they can continue to advertise “10 cents/minute” or whatever, but only if you read the fine print do you discover that you will be paying a minimum of $XX per month in various mandatory fees.

The deal changes – without your consent

Not only are phone companies taking advantage of deregulation by imposing new monthly fees on customers of deregulated service, they are particularly fond of changing the deal in mid-stream. So, when you agreed four years ago to switch to Bell’s First Rate long distance plan, you did so on the understanding that it would cost you nothing, and that you would only benefit from lower per minute rates.
That’s the way it was, at first. Then, a couple of years ago, Bell removed 2 hours/day from the discount calling period and limited the amount of calling eligible for the $20/mo. maximum. Most affected customers didn’t notice until they got their bills. A year later, Bell imposed a $1.25/mo. “Network Charge” on all of its unregulated toll plans. This charge was small enough that few customers noticed and even fewer complained. Shortly thereafter, however, Bell applied a $4.95/mo. minimum charge on its First Rate plan. Suddenly, a whole host of subscribers who had originally agreed to a deal with no monthly charges, found that they were being forced to pay $6.20/mo. even if they made no long distance calls! Indeed, many subscribers insist that they never agreed to be put on the First Rate plan in the first case.
Bell is not alone in unilaterally changing fundamental terms of contract with its customers in mid-stream, without the customers’ consent. Telephone, cableTV and Internet companies are all taking advantage of the lack of regulation to do likewise. Usually, the company will make some minimal effort to notify its customers of the change, but the notice is almost always inadequate – as proven by the fact that most customers don’t notice it.
However, even adequate notice in such cases is not sufficient. When a company wants to make a material change to a contract regarding ongoing services, it should not be able to do so via negative option. The Ontario government has recognized this, in its recently introduced Bill 180 to reform consumer protection law. Section 13 of that Bill requires companies to obtain affirmative consent of customers before making a material change to the service. In the meantime, consumers are taking their grievances to court via class actions.

Conclusion

So, where are we with competition and deregulation in telephone service?
Clearly, consumers have benefited from lower long distance rates and an increased array of service options, including wireless. At the same time, however, local rates have increased so much that many – possibly most – Canadians are paying more now for the same telephone services than they were in 1992. Pay phones are disappearing. Customer service is unacceptably poor. Information in the market is so confusing that consumers are unable to counter manipulative conduct by service providers.
Ten years after the introduction of competition in the long distance telephone market, it’s time to take stock of where we are and where we are headed. Competition has not lived up to consumer expectations in many respects. It’s time to acknowledge the shortcomings of market forces and to put in place effective regulatory measures to ensure the continued delivery of high quality telephone service throughout the country, and to protect consumers from unfair market practices by competitive service providers.

Consumers cheer cap on local phone rates

Consumer groups across Canada cheered the CRTC’s decision today to cap local phone service rates at current levels. Rates for basic residential service, before surcharges and taxes, currently range from $20 to $30 per month. The CRTC decision applies a complicated formula which will prevent further overall increases, assuming that inflation remains below 3.5%.
“This was the right decision to make”, stated Philippa Lawson, Counsel for the Public Interest Advocacy Centre, who represented a coalition of consumer groups in the CRTC proceeding. “The telephone companies have been making heaps of profit on local service: rates of return on common equity of these companies ranged from 16.6% to 27.7% in 2000, well above the 11% benchmark set by the CRTC in 1997, and well above the 9.5% to 10% considered fair for regulated gas and electric monopolies. Rates needed to be frozen, if not reduced, in order to achieve a fairer balance between ratepayer and shareholder interests.”
The CRTC’s decision follows weeks of hearings last fall, which pitted incumbent phone companies, led by Bell Canada and TELUS, against competitors and consumers. The Bell companies asked to increase residential rates to as much as $30/mo., while TELUS asked to increase them to as much as $35/mo. Competitors asked for big discounts on the rates they pay to the incumbent telephone companies for access to the network.
Competition has cost residential consumers more
While consumers have benefited from reductions in long distance rates over the past several years, rates for local services have steadily increased. Residential customers are now paying on average twice what they were paying in 1992 for basic local service. At the same time, services such as directory assistance and inside wire repair, are no longer free. “Many residential consumers – possibly most – are paying more overall for the same basket of telephone services than they were in 1992, before competition was introduced in this market”, said Ms. Lawson.
“It’s ironic that competition, which is supposed to bring lower prices and lower profits, has instead led to higher prices for local service, and higher profits levels for the telephone companies”, said Lawson. “Hopefully, ordinary consumers will now start seeing some benefits from competition in the local phone market.”
“This decision rights the balance among the three major stakeholders: incumbents, competitors, and consumers”, said Lawson. “It acknowledges that the past regime was overly favourable to the incumbent telcos, and shifts the balance so that both competitors and consumers share in the benefits of this highly profitable industry.”
The decision also establishes a quality of service penalty mechanism, under which substandard service quality will be punished by financial penalties of up to 5% of total annual local revenues. Until now, poor quality of service performance by the telephone companies has been tolerated without any penalty. “This incentive mechanism was badly needed in order to offset the tremendous pressure on the telcos to cut costs”, said Lawson. The Commission notes in its decision that the incumbent telephone companies have exhibited “ongoing, and for the most part, uninterrupted substandard performance in the years 1998 to 2000.” (para.706)
– – – –
Contact: Philippa Lawson, PIAC tel: 613-562-4002 x.24 (Ottawa)
Jean Sebastien, Action Réseau Consommateur 514-521-6820 (Montreal)
Robert Sexty, Consumers’ Association of Canada 709-579-3311 (St. John’s)
Pat MacDonald, BC consumer coalition 604-687-3017 (Vancouver)
Jim Wachowich, CAC 780-429-0555 (Edmonton)
Byron Williams, Manitoba consumer coalition 204-985-8533 (Winnipeg)

Consumer advocates cheer privacy finding re: Aeroplan

Those fed up with personalized junk mail and telemarketing, but unable to control it, have an ally in the federal Privacy Commissioner. George Radwanski, the Privacy Commissioner of Canada, today released his findings on a complaint lodged last summer about the customer information practices of Air Canada’s Aeroplan Frequent Flier program. In a strongly worded report, the Commissioner lambasts Air Canada for failing to obtain the informed consent of Aeroplan members to the sharing of their personal information with external sources, as well as with other Aeroplan members.
The Commissioner found that Air Canada’s information practices violate the federal data protection legislation in a number of respects. Perhaps most significantly for other businesses, the Commissioner found that commonly-used “opt-out” (also referred to as “negative option”) approaches are inadequate when it comes to getting consumer consent to the sharing of detailed personal data for marketing purposes. He recommended instead that Air Canada “seek positive (i.e., opt-in) consent from all Aeroplan members regarding all information-sharing situations outlined in [its] brochure”. These situations included the provision of mailing lists to Aeroplan partners as well as other companies.
“This is an important win for consumer privacy”, said Philippa Lawson, counsel for the Public Interest Advocacy Centre. “It’s time that companies begin to respect consumer privacy, instead of just treating consumer information as a commodity that they can freely collect, use, and trade without the individual’s knowledge, let alone consent.”
“The Privacy Commissioner’s report is consistent with public opinion on this issue: negative option consent is not good enough, especially where it is not brought to the attention of the individual, is not clearly worded, or is not sufficiently detailed,” said Ms. Lawson. “What use is consent if the individual doesn’t even know what he or she is consenting to?”
Last summer, PIAC commissioned a nation-wide survey of public opinion on this issue. 82% said that businesses should obtain their permission before using their information for further marketing purposes. A clear majority (69%) did not consider opt-out approaches to be acceptable for such purposes. Almost all respondents (94%) considered it important that negative option approaches to consent be brought to their attention, and that companies make it easy for them to opt-out. (See http://www.piac.ca for a copy of the survey report.)
PIAC subsequently filed a complaint with the Privacy Commissioner about allegedly inadequate opt-out practices on the part of several large businesses, noting that such practices were widespread and not limited to the named companies. The Commissioner has yet to release his findings on that complaint. (See http://www.piac.ca for a copy of that complaint.)
“The Aeroplan case sets an important precedent for businesses generally”, said Ms. Lawson. “Where consent is required, it must be obtained in a meaningful way. The best way to do that is through positive, opt-in consent. Negative option consent is dangerous, because it is so easy for people to miss or to misunderstand.”
According to the Commissioner’s report in the Aeroplan case, only about one percent of Aeroplan members were informed, via a brochure mail-out, of the company’s sharing of their personal information with other companies. Even then, the brochure was so vague and confusing in some respects that “not even Air Canada knew precisely what it meant”, according to the Commissioner’s report. Moreover, Aeroplan was collecting information about plan members’ personal and professional interests, demographics, financial status, and use of, or preference for, certain products and services, from unnamed external sources. For this type of information, the Commissioner found that opt-in, or positive, consent, is required.
Contact:
Philippa Lawson, PIAC
tel: 613-562-4002 x.24
Commissioner’s report

Survey of Canadians views (Direct Marketing) – COMMUNIQUÉ DE PRESSE

Les Canadiens s’inquiètent d’un « Big Brother » dans le secteur privé et préfèrent qu’on ne présume pas de leur consentement au partage des renseignements personnels

Ottawa — Les résultats d’un sondage national rendu public aujourd’hui montrent que les Canadiens désapprouvent les pratiques d’affaires généralisées qui conduisent les entreprises à utiliser et à partager des informations à leur sujet sans qu’ils soient au courant ou sans leur consentement. Dans un sondage financé par Industrie Canada et réalisé par Recherches EKOS pour le compte du Centre pour la défense de l’intérêt public (CDIP), les entreprises ne peuvent présumer du consentement des consommateurs au développement d’outils de marketing fondés sur un profil personnalisé de préférences en matière de consommation : bien que plusieurs ne s’en inquiètent pas, 41 % des Canadiens ne veulent pas que les entreprises conservent dans leur dossier la liste de toutes les transactions qu’ils ont effectuées avec elles ; même en tenant compte de l’existence de cette pratique, 82 % des Canadiens veulent que les entreprises obtiennent leur permission avant de développer de tels outils.
« Si les entreprises ne demandes pas le consentement avant d’établir des profils des consommateurs pour fins de marketing, elles prennent une approche à la « Big Brother » que les consommateurs n’apprécient pas, » a déclaré Jean Sébastien, représentant d’Action Réseau Consommateur et de la Fédération des ACEF du Québec.
La grande majorité des Canadiens veulent que les entreprises développent une approche où le consentement est demandé clairement, plutôt que des approches dites d’option négative, approches qui présument du consentement, notamment, pour le cas du commerce électronique, les cases pré-cochées. En demandant clairement et explicitement le consentement au consommateur, rien n’est présumé. Néanmoins, la plupart des entreprises utilisent l’option négative. Plus des deux tiers des Canadiens considèrent cette approche inacceptable à moins qu’elle soit portée à l’attention des consommateurs, qu’elle soit clairement formulée, qu’elle offre suffisamment de détails et qu’il soit facile d’indiquer ses préférences. « Il est rare que toutes ces conditions soient rencontrées, » a déclaré Philippa Lawson, avocate pour le CDIP.
De façon plus marquée, les consommateurs s’inquiétaient que l’on présume de leur consentement dans le cas d’échange de données entre compagnies affiliées. Quant au cas d’échange d’informations entre entreprises non-affiliées, l’inquiétude des consommateurs atteignait un sommet.
« Les Canadiens affirment sans détour qu’ils n’apprécient pas les pratiques d’affaires courantes, » a ajouté Mme Lawson. « Ils ne veulent pas que les entreprises présument de leurs préférence en matière de protection des renseignements personnels, même s’il y avait des coûts additionnels pour que les compagnies recueillent un consentement explicite. »
Le sondage démontrait aussi que les Canadiens sont irrités par la quantité de courrier non sollicité et d’appels de télémarketing qu’ils reçoivent. 74 % ont exprimé une inquiétude en ce qui a trait au courrier publicitaire personnalisé et 61 % demandent que cessent tous les appels de télémarketing qu’ils reçoivent à la maison même si cela voulait dire qu’ils perdraient de bonnes opportunités d’achats.
Malgré le fait que la loi fédérale impose aux entreprises d’obtenir le consentement avant de colliger, d’utiliser ou de partager des renseignements personnels dans leurs activités commerciales, la loi reste imprécise à définir comment les entreprises doivent obtenir le consentement. De plus, il n’existe pas de mécanisme facile pour les consommateurs pour stopper l’inondation de marketing direct. À ceci, s’ajoute le fait qu’il est difficile pour les consommateurs de savoir ce que les entreprises font avec les renseignements personnels : la plupart des gens ne savent pas à quel point il y a collecte, utilisation et partage d’informations par les entreprises avec lesquelles ils font affaires.
« Il est clair que les consommateurs ne peuvent consentir à des pratiques qu’ils ne connaissent pas, » a affirmé Mme Lawson. « L’option négative ne constitue pas un réel consentement dans ces circonstances. Les entreprises doivent expliquer ce qu’elles feront de l’information et obtenir le consentement explicite du consommateur avant d’utiliser l’information personnelle qu’elles possèdent à d’autres fins que de faire parvenir un produit ou de fournir un service ».
Le sondage réalisé à la fin de juin et au début de juillet avec un échantillon de plus de 1000 personnes, visait à connaître l’opinion des Canadiens sur l’approche que les entreprises devraient retenir pour obtenir leur consentement quant à l’utilisation de renseignements personnels. Les enjeux ont été discutés plus à fond avec quatre focus groupes. Les résultats du sondage sont considérés précis avec une marge d’erreur de 3,1 %, 19 fois sur 20.
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POUR PLUS D’INFORMATIONS, CONTACTEZ :
À Ottawa:
Philippa Lawson, CDIP : tél. : 613-562-4002, ext. 24
À Montréal:
Nathalie St-Pierre, Action Réseau Consommateur et Fédération des Associations coopératives d’économie familiale : tél. : 514-521-6820
À Toronto:
Jim Savary, Association des consommateurs du Canada : tél. : 416-736-2100, ext 88150

Survey of Canadians views (Direct Marketing) – News Release

Canadians Wary of Private Sector Big Brother: Want Opt-in Approach to Personal Data Use

Ottawa – Results from a nation-wide survey released today show that Canadians disapprove of widespread business practices in which companies use and share data about them without their knowledge or consent. According to the Industry Canada funded survey, conducted earlier this summer by EKOS Research for the Public Interest Advocacy Centre (PIAC), businesses cannot assume consumer consent to profiling for the purpose of further direct marketing: while many do not mind, 41% of Canadians don’t want companies tracking their purchases, and 82% want businesses to obtain their permission before engaging in such practices, in any case.
“If companies do not ask for consent before profiling their customers for marketing purposes, they are taking a Big Brother approach that consumers don’t appreciate”, said Jean Sébastien, a consumer advocate with the Quebec-based groups Action Réseau Consommateur and Fédération des ACEFs.
The vast majority of Canadians want businesses to use “opt-in” approaches to consent, rather than the “opt-out” or “negative option” approaches that currently predominate in the marketplace. Under “opt-in” approaches, no assumptions are made about consumer consent; the consent must be explicitly provided. Most companies, however, use “opt-out” approaches under which they assume consent unless the customer tells them otherwise. Over two-thirds of Canadians do not consider such approaches to be acceptable, unless they are brought to the customer’s attention, are clearly worded, provide sufficient detail, and are easy to execute. “Rarely are all of these conditions met”, says Philippa Lawson, counsel for PIAC.
Consumer demand for meaningful approaches to consent was even stronger regarding the sharing of their information with affiliates, and was strongest regarding the sharing of their information with unaffiliated third parties.
“Canadians are saying loudly and clearly that they don’t like current business practices”, said Lawson. “They don’t want corporations making assumptions about their privacy preferences, even if it costs more to get explicit consent.”
The survey also shows that Canadians are bothered by the amount of unsolicited direct mail and telemarketing that they are receiving: 74% expressed concern about personalized junk mail, and 61% want to stop all telemarketing calls to their homes even if it means that they miss out on a really good opportunity.
Despite federal legislation requiring companies to obtain consent before collecting, using, or disclosing personal information in the course of commercial activities, there is no clear guidance as to how companies should go about getting consent, and no easy way for consumers to stop this inundation of direct marketing. Nor is it obvious what businesses are doing with personal customer information: most people are unaware of the extent to which businesses with whom they deal collect, use and share their personal information.
“Clearly, consumers cannot be consenting to practices of which they are unaware”, said Ms. Lawson. “Negative option consent is not real consent in these circumstances. Companies need to explain what they want to do with the customer information, and obtain the customer’s explicit, positive consent to that before using personal information to do anything other than provide the product or service requested by the customer.”
The survey, conducted in late June and early July, questioned over 1,000 Canadians about their views on whether and how businesses should go about obtaining their consent to the use of their personal information for marketing purposes. The issues were further explored with focus groups. The survey is considered accurate within 3.1 percentage points, 19 times out of 20.
The full survey report is available via http://www.piac.ca
For more information, contact:
In Ottawa:
Philippa Lawson, PIAC: tel: 613-562-4002 x.24
In Montreal:
Nathalie St.Pierre, Action Réseau Consommateur et Fédération des Associations Coopératifs d’économie familiale, tel: 514-521-6820
In Toronto:
Jim Savary, Consumers’ Association of Canada, 416-736-2100 x. 88150

Telemarketing Irks Canadians

Ottawa
NEWS RELEASE

TELEMARKETING IRKS CANADIANS

Canadians are getting fed up with telemarketing, according to recent market research. In survey results released today, a strong majority of Canadians express a desire to stop all telemarketing calls to their homes.
When presented with two alternative statements, 61% chose the statement “I would like to stop receiving all telemarketing calls to my household even if it means I may miss out on a really good opportunity”, while only 38% chose “I don’t mind receiving telemarketing calls because I can always say no or not answer the phone”.
The survey results support calls by consumer groups for more regulation of telemarketing, so as to permit consumers to control the amount of unsolicited calls they receive, and to punish those marketers who don’t respect consumer “Do Not Call” requests. A number of groups are calling for a single mandatory “Do Not Call” registry, so that people have only to call one number to get off all telemarketing lists.
“People are saying that they want more control over these intrusive and annoying calls”, said Philippa Lawson, counsel for the Public Interest Advocacy Centre (PIAC), sponsor of the survey. “The industry has proven itself unable to self-regulate, so it’s time for the regulator to step in with an effective way for consumers to stop these calls.”
The CRTC is currently reviewing the rules applicable to telemarketers, and has invited public comment on the issue by December 21st, 2001 (date revised October 27th, 2001). More information on how to comment can be found at http://www.crtc.gc.ca/archive/eng/Notices/2001/PT2001-34.htm
The survey of over 1,000 Canadians was conducted by EKOS Research Associates Inc. for PIAC last month. The survey is considered accurate within 3.1 percentage points, 19 times out of 20.
FOR MORE INFORMATION, CONTACT:
Philippa Lawson, PIAC 613-562-4002 x.24 plawson@piac.ca
Jean Sebastien, Action Réseau Consummateur et Féderation des ACEFs 514-521-6820 x.22
August 9th,2001
COMMUNIQUÉ DE PRESSE

Le télémarketing irrite les Canadiens

Les Canadiens en ont assez du télémarketing. C’est ce que démontrent des résultats de sondage rendus publics aujourd’hui. Une forte majorité de Canadiens expriment le désir de ne plus être sollicités par téléphone à la maison.
Deux affirmations ont été proposées aux personnes sondées. 61 % ont choisi l’affirmation “J’aimerais cesser de recevoir des appels de mise en marché, même si cela veut dire que je risque de manquer de très belles opportunités.” 38 % ont choisi : « Ça ne me dérange pas de recevoir des
appels de télémarkeing puisque je puis toujours refuser d’acheter ou ne pas répondre au téléphone. ”
Les résultats du sondage viennent confirmer les demandes de groupes de consommateurs pour une réglementation plus stricte du télémarketing afin de permettre aux consommateurs de contrôler la quantité d’appels non sollicités qu’ils reçoivent. De nouvelles règles édictées par le Conseil de la radiodiffusion et des télécommunications canadiennes devraient prévoir des peines pour les entreprises qui ne respecteraient pas la demande d’un consommateur de n’être pas sollicité par téléphone. Plusieurs groupes de consommateurs demandent au CRTC la mise en place d’un registre national auprès duquel les consommateurs ne voulant pas recevoir d’appels de sollicitation pourraient faire inscrire leur nom. Cette proposition permettrait aux consommateurs de n’avoir qu’un appel à faire pour voir leur nom retiré de toutes les listes de télémarketing.
“Les gens disent qu’ils veulent plus de contrôle sur ces appels importuns et dérangeants,” explique Philippa Lawson du Centre pour la défense de
l’intérêt public (CDIP) qui a commandé le sondage. “L’industrie a démontréqu’elle n’était pas capable de s’autoréglementer. Il est temps que l’organisme réglementaire responsable de ces questions intervienne et mette en place un système efficace qui permette aux consommateurs de mettre fin à ces appels.
Le CRTC a lancé un avis public sur règles de télémarketing et a invité la population à commenter la question jusqu’au 21 Décembre. http://www.crtc.gc.ca/archive/frn/Notices/2001/PT2001-34.htm
Le sondage, construit avec un échantillon de plus d’un millier de Canadiens, a été réalisé par la firme Recheche EKOS au nom du Centre pour la défense de l’intérêt public. Les résultats du sondage sont considérés précis à concurrence de 3,1 %, 19 fois sur 20.
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POUR PLUS D’INFORMATIONS, CONTACTEZ :
Jean Sébastien, Action Réseau Consommateur et Fédération des ACEF du Québec 514-521-6820 ext.22
Philippa Lawson, Centre pour la défense de l’intérêt public 613-562-4002 ext.24

Survey of Canadians views (Direct Marketing) – Résultats en français

Version en PDF [pdf file: 0.39mb]

Survey of Canadians views (Direct Marketing) – Survey Results in English

Available in PDF [pdf file: 0.3mb]

Survey of Canadians views (Direct Marketing) – Conclusions en français

Utilisation professionnelle des renseignements personnels des consommateurs : ce qu’en pense le public

Conclusions
Cette étude fait la lumière sur la manière dont le grand public définit et considère les questions entourant leur consentement. En général, les résultats confirment l’importance d’obtenir le consentement non équivoque de la part des consommateurs pour la collection, l’utilisation ou la révélation des renseignements personnels les concernant à des fins de marketings secondaires, que ce soit à l’interne, entre les membres affiliés ou avec des tiers. Pour résumer, cette étude présente six conclusions qui, on l’espère, montreront la direction aux décideurs qui risquent d’appliquer des aspects du projet de loi C-6.

Les entreprises ne peuvent pas assumer le consentement des consommateurs à d’autres fins de marketing. Les Canadiens ont des opinions très différentes. Tandis que beaucoup d’entre eux disent que ce genre de pratiques ne les dérange pas, quelques personnes avouent même les apprécier, une grande proportion des Canadiens n’est pas à l’aise avec les entreprises qui utilisent leurs informations personnelles à d’autres fins de marketing (38%). Un pourcentage encore plus élevé (48 %) s’oppose au partage de ces données avec les membres affiliés. De plus, la plupart des Canadiens ne savent pas dans quelle mesure les entreprises recueillent, utilisent et dévoilent les renseignements les concernant à des fins commerciales. Par exemple, 54 % des personnes qui participent à des programmes de fidélisation ignorent le fait que de tels programmes recueillent et utilisent régulièrement leurs habitudes d’achat à des fins de marketing. Il est évident que les consommateurs ne peuvent pas consentir à des pratiques qu’ils ignorent.
Les Canadiens s’inquiètent vivement du marketing direct non sollicité et du télémarketing en particulier. Près de trois Canadiens sur quatre (74 %) s’inquiètent moyennement de la quantité de matériel publicitaire personnalisé non sollicité qu’ils reçoivent. Le télémarketing est un problème épineux; une grande majorité (61%) souhaite mettre fin aux appels de télémarketing qu’ils reçoivent à la maison au risque de manquer une véritable aubaine.
Les Canadiens veulent que la collecte, l’utilisation et la communication de leurs renseignements personnels par les entreprises à des fins de marketing soient contrôlées. Une imposante majorité (82%) déclare que les entreprises devraient obtenir leur permission avant d’utiliser les informations les concernant à d’autres fins de marketing. Il est encore plus important d’obtenir le consentement lorsque les données seront partagées avec un membre affilié. Plus de huit Canadiens sur dix (84%) pensent qu’il est important que les compagnies de téléphone obtiennent leur consentement avant que les renseignements puissent être partagés au sein du même groupe de sociétés, cette proportion atteint 87 % pour les banques.

Une nette majorité de Canadiens ne veulent pas que les entreprises assument leur consentement à d’autres fins de marketing. En général, 69 % des Canadiens trouvent que les approches concernant le droit de retrait sont tout à fait inacceptables. Ils veulent plutôt qu’on leur demande leur consentement de façon explicite si une société veut utiliser leurs informations personnelles à des fins de marketing. Les participants aux groupes type ont clairement exprimé leur préférence pour l’approche d’inclusion.
Malgré une préférence pour l’approche d’inclusion, les approches pour le droit de retrait à des fins de marketing sont jugées acceptables dans certaines circonstances. Cependant, leur acceptation est extrêmement conditionnelle. Le droit de retrait est acceptable seulement s’il est clairement expliqué aux consommateurs, s’il est facile à comprendre, s’il contient des détails suffisants, et s’il est facile à exercer. Plus de quatre répondants sur cinq (82%) pensent qu’il est extrêmement important que la possibilité de se retirer leur soit mentionnée; 88 % disent que la procédure pour se désister devrait être claire et facile à suivre.
Cependant, dans la pratique, les exemples concernant la manière dont les entreprises ont utilisé l’approche pour le droit au retrait sont loin de répondre aux souhaits/exigences des consommateurs, ce qui prouve que le concept a besoin d’ê tre amélioré. Les divers formulaires, dont certains contenaient des clauses d’exemption, testés par les groupes type attestaient du manque de volonté des entreprises d’informer les consommateurs qu’ils disposaient d’un tel droit. Le manque de clarté, de détails quant au code d’éthique de l’entreprise, de priorité attachée au droit de retrait, et les difficultés éventuelles pour exercer ce droit constituaient quelques exemples des approches problématiques.