Canada’s new Anti-Spam and Online Fraud Act is expected to come into effect sometime this fall and promises to have a significant impact on any business that communicates with the public through e-mail or other commercial electronic messages (including cell phone spam).

The Act moves Canada into line with the European model, where companies must require active opt-in consent to be put on e-mail lists. The proposed Act demands that companies either have that explicit consent or the implied consent of having done business with the customer in the past two years.

However, companies will want to run a tight ship when it comes to recording that consent and monitoring that two-year window – penalties in the new Act are significant. Fines range up to $1 million for individual offenses and $10 million for corporations, and of course there are penalties available against directors – something we’re seeing more and more of.

One of the more interesting aspects of the penalty provision of the Act is the private right of action, or self-help, remedy. This allows individuals to pursue infringing organizations on their own and to collect the penalties themselves. This is a significant measure that will provide a considerable incentive for aggrieved parties to enforce the legislation from the bottom up.

There is no doubt that the legislation will have a significant impact, as it has in every other jurisdiction where similar legislation has been enacted. If your business engages in electronic communications with the public or with your customer base, please speak with your legal counsel as soon as possible to find out what you need to do in order to be fully compliant with the Act before it comes into force.

Scott R. Young