Industry Committee on March 10th, 2020

[Ian Scott]

We can't regulate—

[Brian Masse, NDP, Windsor West, ON]

We had this discussion on the do-not-call issue when we first did this.

I want to get a clarification in terms of the culture that you're dealing with.

The way that I view it, Canadians are equally frustrated about phones and landlines in that they pay a lot of money for this. For the phones, the government has received over $20 billion in assets from the spectrum auction from the telcos over that time. They've also paid some of the highest prices, and they're still bothered by a lot of this activity.

Do you differentiate between somebody who uses the do-not-call list for unsolicited calling—sometimes they can be given AMPs for that—versus that of the CRA fraud scam or somebody internationally? I view all those activities as the same type of fraudulent activity because they are not even following a rule that's supposed to be in place for Canada or they're using activity that is unscrupulous with regard to trying to solicit them.

Do you distinguish between any of those types of activities that take place?

[Ian Scott]

We do in particular because some of them are criminal, and we don't prosecute or pursue criminal matters. We share that with our enforcement colleagues and pass those off.

You're right that all of these offences are equally problematic. I wouldn't say equally; the fraudulent activities are worse.

[Brian Masse, NDP, Windsor West, ON]

I get your point.

[Ian Scott]

It's also, if you wish, a spectrum.

A decade ago we were focused on spam emails, phony emails.

[Brian Masse, NDP, Windsor West, ON]

Yes.

[Ian Scott]

The systems are now working to reduce that.

Today, the focus is on spoofing, and it's growing, not just in calls, but on texts. These things evolve, and we have to pursue all of them. The real distinction, to answer your question, is criminal versus civil.

[Brian Masse, NDP, Windsor West, ON]

I have a little bit of concern with the low level of AMPs that you have from last year. The largest one was $90,000. It doesn't seem much of a dissuasion to the businesses that get caught.

For instance, if a business that goes through your program and goes through the process gets caught, and you register an AMP on it, is there a screen to see telcos' relationship with this with regard to their activity and if there's any connection to whether they were co-operative in the process to try to block some of this? Perhaps they should have been more attentive than they demonstrated.

[Ian Scott]

Mr. Harroun is responsible for enforcement, so I'll ask him to add something.

Obviously, we would investigate thoroughly. That's not usually the case. Usually, it's a telemarketer that's not following the rules.

Steven, do you have something to add?

[Steven Harroun]

I can't really answer your telco question or make the connection there. On the AMP side and the investigations that we make, it's important to note that under our civil regime, administrative monetary penalties are to promote compliance versus to be punitive. That is very clear in the direction we have to follow under the legislation.

We promote compliance through a significant amount of administrative monetary penalties to the Crown. We also ask them to put in place compliance programs and we do follow-up audits, etc. It's to ensure that the inappropriate activities of the telemarketer don't continue.

[Brian Masse, NDP, Windsor West, ON]

I'm going to give a little time to Commissioner Slinn. It's too bad because I still have questions on STIR/SHAKEN and so forth.

Commissioner, I noticed you have a lot of different programs out there, but they seem to be kind of scattered or project-based. Are there supports that could be provided to do more of a pan-Canada type of thing? You mentioned a series of really good initiatives in Alberta. I know that in Ontario they did some really good work.

Are there the appropriate resources to be able to do a more robust cross-Canada approach to this?

[A/Commr Eric Slinn]

I think there's a recognition out there that in the Canadian law enforcement community writ large—not just the RCMP because one has to remember we're not the police of jurisdiction in many spots in Ontario—we need to do more in the space of fraud. We need to be more coordinated.

Through the organized crime committee of the Canadian Association of Chiefs of Police we are looking at ways to share best practices and to get more engagement of law enforcement around fraud than there has been. That all revolves around the whole cybercriminality. We're used to working in a model that doesn't work in that cyber area.

Policing is changing dramatically, but I think through the Canadian Association of Chiefs of Police there is a greater willingness to do more collaboratively there.

[Brian Masse, NDP, Windsor West, ON]

A lot of the time, economic models put this amount in and they get this in return. You gave an example of $16.8 million in proceeds that you know of from one crime activity. There's all the stuff you don't know of.

If there were more resources and if it were taken—I don't want to say more seriously because I don't want to say it's less serious.... Maybe there's a more organized approach to dealing with this that actually has a specific, defined strategy. Do you think we'd make our money back by stopping other criminal activity from taking place?

[A/Commr Eric Slinn]

Resources are always an issue. We're actually looking at technology and how we can use big data analytics to hone in more to make a greater impact on those specific groups that are having the greatest impact. Lots of people are doing this, but who are those key facilitators or enablers that we can whack through criminal disruption?

[Brian Masse, NDP, Windsor West, ON]

I have a last question for the CRTC. Is there a penalty for not putting STIR/SHAKEN in place?

[The Chair, Liberal, Sherry Romanado]

Mr. Masse, I'm sorry, but that's your time.

We will move now to the next round of questions of five minutes. My colleagues have a strategy of not looking at me so they can't see the yellow card. I know my witnesses are seeing it. This means wrap it up because you have 30 seconds left to respond.

The next five-minute question goes to MP Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

Since we're considering fraud calls, I also wanted to raise another means of fraud that can come to people through their mobile phones. You referenced it in your last statement, Mr. Scott. A lot of people, especially younger Canadians, increasingly communicate through online social media and text messaging. I have a family member who was a victim of fraud through Facebook, as well. They accessed bank information and withdrew funds. Fortunately, we got that back.

As a result, scammers are shifting to text-based and online methods. Out of the tens of millions of dollars that are being lost to fraud every year, I'm wondering what share of that is being lost to text or online messaging fraud.

[Ian Scott]

I don't know that we have data on the share of those losses. You're absolutely right that the pattern.... Calls are only part of the problem now. Texts are increasingly a problem. They're used very cleverly, frankly, by bad actors. You get a text from your bank saying that they need an instant response.

First, you need to understand that texts fall under CASL, the anti-spam legislation. The processes we follow will be very similar. STIR/SHAKEN and other technologies like this will be used. At the end of the day, if it's fraudulent, we collect the information through our intelligence gathering group. We share it with law enforcement and other partners and, if it's fraudulent, law enforcement will go after them.

I hope that answered your question.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Yes.

[A/Commr Eric Slinn]

I can shed some light for you really quickly, in a 15-second response.

From what we're seeing through the Canadian Anti-Fraud Centre in 2019, it's roughly $25 million from telephone fraud and $54 million from Internet, so double. We're seeing more activity in online frauds than the phone calls saying, “There's a warrant for your arrest. Come on down.”

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Right. Building on that, then, is there actual data that suggests fraud messages are occurring as much as or more than phone call situations?

[Ian Scott]

I will give you some frightening numbers. The U.S. follows this closely—there are a number of commercial firms. There were 100 billion calls in the last two years. For February of this year, the latest data says that 4.8 billion calls were placed in the United States. Of those, 43% were fraudulent. Those 4.8 billion robocalls equate to 1,900 per second. It's 43% of those, so it's something in the order of 1,000 a second. That's the kind of volume of problem we're confronting.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Seeing the number of Canadians who are receiving these spam or text messages, then, and who have reported losing money as a result, how can we work with Canada's major telecom companies to prevent these messages from being sent to Canadians?

In fact, we have an example of one just being received by one of the members of the committee here right now.

[Ian Scott]

I receive them and my mother receives them. I have my own special complainant whom I have to pay special attention to.

As I mentioned earlier, the carriers have every incentive to work with us and for themselves in their own self-interest to solve this problem. They don't want unhappy customers.

What are we doing? I mentioned we have universal call blocking. They are implementing STIR/SHAKEN. They are working at our behest on a call trace approach. They are also working on customized approaches for their own customers. For example, a white list is something they're developing. Some of the companies are exploring how they could use algorithms or artificial intelligence to begin screening.

This is an ongoing problem, but as my colleagues from the RCMP mentioned earlier, it's fundamentally a technology problem and each time we close a door, somebody finds a new opening and comes up with a new approach. This will never go away. It's about controlling and dealing with the biggest problems.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

For sure.

Innovations in artificial intelligence have allowed companies to develop screening services to filter out unwanted calls and problematic numbers. For example, Google has developed a screening service using AI technology.

Has the CRTC looked into using similar technology at a national scale to help reduce further calls? I kind of touched on that a bit here.