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May 19, 2014

Important Memorandum to MeloTel Customers

Many of our customers have asked us for clarification of the Telephone Recording Laws in Canada and Unilaterally Recording Customer Phone Calls.

The Question
If a Canadian business, that makes and receives telephone calls, wants to record a customer conversation, are they required to notify both their own employee (who will be one of the parties of the conversation) and the customer? Is it sufficient to just inform the business’s own employee?

The Answer
Essentially, most people get confused by the Criminal Code of Canada law a person can “intercept” (record, listen to, acquire) a private communication (including a phone call) if one person consents. However, this is only relevant for non-business purposes. Businesses are subject to the applicable commercial privacy legislation. Guidelines put forth by the Privacy Commissioner of Canada interpret the law to require that businesses advise their clients that a call may be recorded and to let them know of the specific purposes. The person must consent to the recording, but this consent can be implied (e.g. by them continuing with the call).

The Criminal Code of Canada says; The laws relating to recording customer phone calls are often confused with the laws in the Criminal Code of Canada (“Code”) relating to the intercepting (listening to, recording or acquiring of) private communications. Under the Code, a person may intercept a private communication as long as they have the consent of one of the parties to the private communication.

However, this is not the case with recording business phone calls.

Brief Overview of Privacy Legislation for Businesses
In Canada, the federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) governs how private sector entities collect, use and disclose personal information in the course of carrying on commercial activities. Personal information is broadly defined in PIPEDA to be “information about an identifiable individual”.

The general rule is that PIPEDA applies to all private sector entities in all provinces. However, if a province has enacted “substantially similar” privacy legislation for the private sector, the private sector entities (companies) in that province may be exempt from compliance with PIPEDA so that they may follow their own province’s legislation.

Currently, British Columbia (Personal Information Protection Act), Alberta (also called the Personal Information Protection Act) and Quebec have enacted their own legislation which has been deemed to be substantially similar to PIPEDA.

Compliance with Applicable Legislation
Recording telephone calls involves the collection of “personal information”. Therefore, the first step in the analysis of the above question is to determine whether the business must comply with PIPEDA or another provincial legislation. If the “commercial activity” that is occurring is only in Alberta, British Columbia or Quebec, then the applicable legislation in those provinces will likely apply. If the “commercial activity” applies in any other province or is “inter-provincial”, then PIPEDA will likely apply.

The Privacy Commissioners in each province provide additional guidance on matters that are not explicitly discussed in the legislation.

Guideline for Recording of Customer Telephone Calls
The Office of the Privacy Commissioner of Canada (“OPC”) which governs compliance with PIPEDA released a Guideline for Recording of Customer Telephone Calls (“Guideline”). The Guideline advises of the following:

  • Organizations that are subject to PIPEDA must comply with PIPEDA when recording calls.
  • The same requirements apply to calls initiated by the customer and to calls initiated by the organization.
  • Organizations contracting out call centre, telemarketing and similar services must also ensure that third parties acting on their behalf comply with the Act.

To comply with PIPEDA:

  • Organizations may only record calls for specified purposes;
  • The purposes must meet the reasonable person test;
  • Organizations must inform the individual that the call may be recorded and make a reasonable effort to ensure that the individual is advised of the purposes for which the information will be used;
  • The recording may only take place with the individual’s consent;
  • The information collected must only be used for specified purposes; and
  • Organizations must ensure that they comply with the other provisions of PIPEDA with respect to matters such as safeguards, access, retention and disposal.

As such, conversations should not be recorded unless it is “for purposes that a reasonable person would consider are appropriate in the circumstances”. The individual must be informed of the recording and the purposes and the call may only be recorded with the individual’s consent, except in those very limited cases where consent is not required under PIPEDA. Such cases could include calls made to collect a debt or to investigate a potential case of fraud.

The OPC further advises to use the following procedure when recording customer phone calls:

  1. The individual must be informed that the conversation is being recorded at the beginning of the call. This can be done by an automated recording or by the customer service representative.
  2. The individual must be advised of the purposes. The organization must be clear about the purposes; an organization should not state that it is recording the conversation for quality assurance purposes if, in fact, the recording will be used for other purposes. Informing the individual of the purposes can be done in a variety of ways – verbally, by pressing a number on the keypad (in the case of automated messages) or with clear messages on monthly statements. (For example: If you have any questions about your bill please call 1-800-XXX-XXXX. Please note your call will be recorded for…) If the individual proceeds knowing the conversation is being recorded and the purpose of the recording, consent is implied.
  3. If the caller objects to the recording, the organization should provide the caller with meaningful alternatives. The alternatives might involve not taping the call; visiting a retail outlet; writing a letter; or, conducting the transaction over the Internet.

Recommendation for MeloTel Customers
MeloTel customers should comply with PIPEDA or the relevant privacy legislation and the Guidelines put for by the OPC for its practices on recording its own customers’ telephone conversations.

At this point I find it appropriate always consult with a lawyer who may understand your own unique circumstances. MeloTel offers no warranty and assume no liability for statements made in this memorandum. Customer agrees to release, defend, indemnify, and hold harmless MeloTel, and its officers, directors, employees, agents, representatives, vendors and contractors (“indemnified party” or “indemnified parties”) from and against any and all liabilities, claims, damages, losses, injuries and judgments (including related costs and expenses and reasonable attorney’s fees and other litigation expenses) (“claim” or “claims”) incurred by the indemnified party(ies) arising out of or relating to customer’s (a) violation or breach of any term of our agreement, or (b) misuse of the service.

Please note that MeloTel announces and records all calls in all all departments.

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