Feds crack down on use of word “banking” by non-banks

OSFI just issued an advisory threatening to bring criminal sanctions against non-banks that use the words “bank”, “banker”, or “banking”.  Their cover note gives specific dates by which use must stop.  This derives from section 983 of the Bank Act, which says in part that a non-bank can’t use: “… the word “bank”, “banker” or “banking” to indicate or describe a business in Canada or any part of a business in Canada…”.  Examples given of improper use include: “Come do your banking with us”, “Automated Banking Machine”, “Bank Accounts”, “Better Banking”, and “Mobile Banking”.  It also says they can’t advertise under a “banks” heading of a directory.

The Canadian Credit Union Association was quick to respond with a press release saying:  “Ottawa is telling credit unions to stop using the words Canadians use to describe the work we do … This rule will prevent credit unions from advertising their ‘business banking’ services or even having an ‘on-line banking’ button on a website.”  And that: “OSFI has taken a position that is inconsistent with its past practices and with common sense.”

What do readers think?

Is this crackdown needed to stop confusion in the marketplace and to preserve the rights of banks?

Have terms like “banking” become a generic and acceptable way for credit unions and other non banks to describe their services?

Cross-posted to Slaw

Supreme Court of Canada overrides forum clause in Facebook agreement

The Supreme Court of Canada has decided that a British Columbia privacy class action may proceed against Facebook in the courts of BC, despite the contract naming California as the forum for legal actions.

My personal view is that in business to consumer contracts, if a court decides that a local law is important enough, or if the actions of the business offends local sensibilities, it will find a way to apply local laws and hear the case. This Douez v Facebook decision will be relevant for any future actions in Canada that question the applicability of portions of online or other business to consumer agreements.

Here are some points to take away from the case.

  • The decision only decided that the class action may proceed in BC. The substantive privacy claim has yet to be litigated.
  • The decision shows how difficult this issue is to decide. Of the 7 SCC judges, there were 2 different majority opinions, and a dissent by 3 judges. They were fairly consistent about the test, but came to different conclusions based on the facts and legal philosophy.
  • The case was decided based on the BC Privacy Act that includes a statutory privacy breach tort. It remains to be seen how it would apply to other provinces that may only have a common law privacy tort. Or how it would apply to other issues.
  • It does not render choice of law clauses irrelevant. Nor does it render click-wrap agreements unenforceable. It is still important for vendors to include clear choice of law and forum clauses.
  • It has created uncertainty, and vendors need to know that courts may choose to override forum clauses and perhaps others. The fairer a court perceives the document to be in general (especially in the context of local laws), the more likely it will be followed.
  • Getting privacy right is crucial. If vendors offer services to those in countries with strong privacy laws, they must pay close attention to those laws when designing their products and new features. That includes developing Canadian laws, and for those providing services to European customers, the pending GDPR.

Cross-posted to Slaw

CASL private right of action suspended – but CASL is still here

The Canadian government has suspended the CASL private right of action that was to have come into force on July 1.  The private right of action (most likely in the form of class actions) would have allowed people to sue anyone for sending spam.  Or more accurately for those who violated the technical provisions of CASL.

This is a welcome move.  But while we can breathe a sigh of relief that this remedy is gone, CASL still remains in force and must be complied with.

The government’s press release said:

Canadians deserve an effective law that protects them from spam and other electronic threats that lead to harassment, identity theft and fraud. At the same time, Canadian businesses, charities and non-profit groups should not have to bear the burden of unnecessary red tape and costs to comply with the legislation. 

The Government supports a balanced approach that protects the interests of consumers while eliminating any unintended consequences for organizations that have legitimate reasons for communicating electronically with Canadians. 

For that reason, the Government will ask a parliamentary committee to review the legislation, in keeping with the existing provisions of CASL.

There is no indication that the CRTC will lighten up its enforcement against those who try to comply with the spirit of the legislation, but can’t get the technical details right.

We don’t know how long this review process will take or how long it might be until changes are passed.

And frankly I’m skeptical that the “balanced approach” will go nearly as far as I and others would like to see it go.  I (and I’m certainly not alone in this) have maintained from the start that CASL is one of the most ill-conceived, badly written, impractical pieces of legislation I’ve ever seen.  It provides little benefit – at a great cost.  Tinkering with the legislation won’t fix it – it needs a major overhaul.

Cross-posted to Slaw

Ransomware – fix it before you Wanna Cry

The WannaCry ransomware attack of almost 3 weeks ago may be a fading memory – but we can’t forget how important it is to protect our computer systems.  This is true no matter what kind of business or organization you are.

This video does a good job of summarizing what happened.

The bottom line is that there are some basic things everyone needs to do to reduce the chances of ransomware or malware affecting us.  Unfortunately not everyone does these simple things.

They include:

  • Keeping software and patches up to date
  • Upgrade operating systems before support ends (that means you if you still use Windows XP)
  • Use up to date virus protection
  • Have effective backups
  • Educate users on what not to do
  • Use strong passwords and take advantage of security features such as multifactor authentication

Perhaps the best advice is to not dabble in security, and don’t just follow a checklist like mine above.  Effective security requires a holistic system wide approach designed, implemented, and updated by IT professionals.  Security is a whack a mole game that is constantly changing – it doesn’t follow the “Universal operating instructions” joke of “Set lever A and lever B”.

Cross-posted to Slaw

Self driving cars – privacy points to ponder

Cars collect a significant amount of information about our driving. That data will increase dramatically as we move to autonomous vehicles – and with more data comes more ways to use it.

This information can be used now to find fault in an accident or convict us of driving offences. Some insurance companies offer discounts if we share that data with them and they decide we are a safe driver.

Cars increasingly rely on electronic systems for safety features, and self driving cars are coming. They will increasingly collect and store data about not just the car itself but also its surroundings, and will share that with other cars around it.

What might our morning commute look like in a few years?

A driverless car pulls up to your door. You are ready to go because the car sent you a text when it was 2 minutes away. When you get in the car greets you by name, and tells you traffic is light today. As it pulls out it, it asks if you would like to try a new coffee on promo at Starbucks instead of your usual Tim’s stop. You say yes, and it takes you through the Starbucks drive through. Your coffee is ready because the car has already ordered it and told Starbucks when you will arrive. And the car paid for it.

The car tells you your Amazon package should arrive at the pickup point today, and asks if you want to stop there on the way home.

You pass near a restaurant you have gone to before, and the car tells you about an upcoming special. The car makes a reservation for Friday at your request. As you near your office it shows you your schedule for today, and asks if you want to be picked up a few minutes later because of a late meeting.

So what’s going on here?

You may have programed in things like stopping at Tims on the way to work. Or it may have learned your habit after a couple of commutes. Starbucks may have paid for the special to be mentioned. It may have learned about the restaurant and your Amazon order by reading your emails and schedule.

That all sounds very convenient, but the price of convenience is surveillance. And with surveillance comes the ability for others to use that information for good and for evil.

It has been estimated that a self driving car might generate a gigabyte of data per second. It will be tempting to use that data for all sorts of things.

One vehicle data startup CEO says that by 2020, automakers will be able to make more money selling vehicle data than the cars themselves.

It is not far-fetched to imagine a scenario where a self-driving taxi ride could be immensely cheap or even free, because the revenue from advertising and data generated from the ride might be more valuable than the taxi fare.

For example, car cameras and sensors could spot available parking spaces, know how much traffic there is, how many pedestrians are on a block, and how many cars are in line at a drivethrough.

Who owns this information? Who has the right to use it? Car manufacturers will no doubt claim they do. Keep in mind that in the US secondary use of personal information is more acceptable than it is in Canada or Europe.

The privacy implications are enormous. It’s one thing to know that there are two empty parking spaces on a block. Its totally another to know that my car is parked there, or what stops I make on my commute.

Current privacy laws may not be adequate to deal with these issues. And it challenges the notion of meaningful consent.

As interesting as the idea of self driving cars is, we need to be sure that the price is not too high in terms of privacy and surveillance.

Anyone interested in a deeper dive (drive?) on this subject should look at the BC Freedom of Information and Privacy Association study titled The Connected Car: Who is in the Driver’s Seat?

Cross-posted to Slaw

CASL class actions are looming

The private right of action for sending spam in violation of CASL comes into force on July 1.  Many companies are dreading it – some class action lawyers can’t wait.  The right thing for the government to do would be to completely scrap CASL – the statute is that bad and ill-conceived.  But wishful thinking won’t make it go away.

At the moment, CASL violators are subject to enforcement proceedings by the CRTC. But after July 1, those who have been spammed in violation of CASL can sue the sender.  Here are some things to keep in mind about the private right of action.

  • Individuals can sue a CASL violator – but class actions are most likely.
  • CASL does not say if the right applies only to violations that occur after July 1.  That would be the most obvious interpretation, but expect plaintiffs to say it is retroactive.
  • In addition to the CASL anti-spam formalities, the right of action applies to the anti-harvesting provisions CASL added to PIPEDA, and the email false advertising provisions CASL added to the Competition Act.
  • Damages include actual damages plus statutory damages calculated in a couple of ways – $200 per violation or up to a million dollars per day.  It could get expensive.
  • Directors and officers are at risk to be sued.
  • Depending on timing, a notice of violation from the CRTC or entering into an undertaking with the CRTC may stay a court action.  The reverse also applies – a court can prevent an undertaking or notice of violation.  Potential defendants may have some influence over picking their poison.
  • Due diligence defences are available to mitigate the damage amount.

Cross-posted to Slaw

Lessons from the United passenger “re-accommodation”

The recent United Airlines incident where a passenger was dragged off the plane because United wanted the seat for a United employee is a good reminder of some social media realities.

The obvious lesson is to not bloody your passengers and drag them off your plane.  Or that just because you have the right to do something, doesn’t mean it’s the right thing to do.

But sometimes bad stuff happens.  And often someone is there to record and publish it for the world to see.

When that happens, the social media / public relations lesson is to not react in a way that makes it worse.  Don’t, for example, issue a statement talking about passenger “re-accommodation” that doesn’t suggest any kind of apology or sympathy.  Don’t try to deflect responsibility by talking in terms such as an “involuntary de-boarding situation” – or by focussing blame on the passenger.  And don’t justify it based on your policies or legal rights.  The court of public opinion doesn’t care much about that.

It wasn’t until the third attempt at a response from the CEO that the tone was one of apology and accepting responsibility.

In this case, outrage about the incident was followed by equal outrage about United’s reaction.  It resulted in a social media firestorm and some rather amusing barbs and parodies.

United’s stock lost over a billion dollars at one point yesterday.

The bottom line is if your firm is being lambasted on social media – don’t be tone deaf and defensive about it.  Take a few minutes to look at it from the public’s perspective before you respond.

Cross-posted to Slaw

Did Transport Canada just ground the Canadian hobbyist Drone market?

Transport Canada just put in force an order regarding the recreational use of model aircraft, enforceable by a $3,000 fine. Details are in the graphic below and on the Transport Canada Web site.

Operation of a drone over 35 kg, or for commercial use, has not changed, and still requires a Special Flight Operations Certificate.

Restrictions on flying near airports and aircraft are understandable.

But you can’t operate a model aircraft “at a lateral distance of less than 250 feet (75m) from buildings, structures, vehicles, vessels, animals and the public including spectators, bystanders or any person not associated with the operation of the aircraft”.

If we think about that, it leaves almost nowhere to fly.   You can’t fly it with a friend within 250 feet – unless somehow the friend is “associated with the operation of the aircraft”.   And what is meant by not operating within 250 feet of animals?  If you are in a remote area away from buildings and vehicles, there is likely to be some kind of animal nearby.

Given how restrictive these rules are, not many people will want to own one, and those who already own one may have trouble finding a place to fly it.

The Drone Manufacturers Alliance “believes new drone regulations announced today by Transport Canada will provide only a negligible increase in safety while sharply curtailing the ability of Canadians to explore, photograph their country, and teach their children about science and technology.”

They also said  “The Drone Manufacturers Alliance expects all our members’ customers to fly safely and responsibly, and our years of experience show that technology and education provide a better solution than a hastily-written ban.

Aviation authorities around the world have never recorded a single confirmed collision between a civilian drone and a traditional aircraft. Indeed, many initial drone sightings reported by aircraft pilots have turned out to be birds, balloons or even a plastic bag.”

The only realistic drone to purchase now in Canada are those that weigh 250 grams (0.55 pounds) or less, which are exempt from the rules.  Drones that small may not be as capable as larger ones, but they do exist.

Cross posted to Slaw

Researchers play along with “Tech Support” scam calls

Have you ever been tempted to play along with scammers that phone just to see where it goes and to give them some grief?  Researchers at the State University of New York at Stony Brook did that and more.

They sought out scammers who claim to be from Microsoft or some sort of official tech support, and followed it through to see what happened.  They set up virtual machines that looked like normal PC’s to the scammers who remote on, and let the scam play out.

This Wired article has more detail, including the paper that the researchers wrote, and recordings of the conversations.  It is worth a read if you are curious about how they do it.

Basically the scammer tells the victim that their computer is infected with viruses and spyware.  Then for about $300, offers to clean it up.

Only about 2% of the people they talk to fall for the scam – but the revenue generated is in the tens of millions of dollars.

The US FTC has already used information provided by the researchers to get a $10 million penalty against a Florida based call centre.  About 10% of the call centres are in the US – 85% are in India.

Cross-posted to Slaw