Industry Committee on Sept. 29th, 2022

[The Chair, Liberal, Joël Lightbound]

Mesdames et messieurs, I call this meeting to order.

Welcome to meeting number 35 of the House of Commons Standing Committee on Information and Technology.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, September 26, 2022, the committee is meeting to study fraudulent calls in Canada.

Today’s meeting is taking place in a hybrid format, pursuant to the House Order of Thursday, June 23, 2022.

To enlighten us today, we have the following witnesses from the Canadian Radio-television and Telecommunications Commission: Ian Scott, Chairperson and Chief Executive Officer; Stephen Harroun, Chief Compliance and Enforcement Officer; and Alain Garneau, Director, Telecommunications Enforcement, Compliance and Enforcement Sector.

Gentlemen, thank you very much for joining us today for this meeting of the Standing Committee on Industry and Technology.

Without further ado, I give the floor to Mr. Scott for five minutes.

[Ian Scott, Chairperson and Chief Executive Officer, Canadian Radio-television and Telecommunications Commission]

Thank you very much, Mr. Chair.

I want to note that we're not hearing the volume from your speaker very loudly. I'll see how it is with the other members, but it wasn't very easy to hear you speaking.

Thank you for inviting us to speak on the topic of fraudulent calls in Canada, an issue that has been of particular concern for the CRTC.

As you know, we participated in this Committee’s study in March 2020, and we are pleased to provide an update on our activities.

I’m joined today by Steven Harroun, the CRTC’s Chief Compliance and Enforcement Officer, and Alain Garneau, Director of Telecommunications Enforcement.

Unwanted calls, which often are fraudulent in nature, seek not only to take advantage of Canadians, but also undermine their confidence in the telecommunications system. One of our priorities over the last few years has been to better protect Canadians and prevent as many of these calls from reaching them as possible.

There is no single solution, no silver bullet, that will put an end to this scourge. That's why we have put in place a robust strategy that relies on a number of different technical and regulatory policy solutions.

To begin, for the past two years, telecommunications service providers have been required to block numbers that we refer to as malformed numbers, which contain numbers that wouldn't normally be part of a phone number, a simple example being 000-000 and four digits, which is obviously not a real number. They get blocked automatically so they won't get through. Alternatively, providers could instead offer their subscribers call-filtering services, which provide similar but more advanced call management features.

Callers can also act in bad faith, though, using fake caller IDs to conceal their identities and intentions, a practice known as ID spoofing, and one that has grown phenomenally in recent years. To combat that illegitimate practice, we required service providers to implement STIR/SHAKEN in June of last year, something we discussed with this committee previously. Essentially that technology will enable providers to confirm whether a caller's identity can be trusted by authenticating and verifying the caller ID information for IP-based calls, which will allow Canadians to determine which calls are legitimate and which need to be treated with some caution, kind of a red light, yellow light and green light.

We're awaiting the first annual reports from the providers, and those will help us assess how implementation has progressed and help us understand what the results are revealing to us. What we do know, however, is that many of the technical issues we and the industry were confronting have been overcome, and also, smaller providers are coming on board to provide similar protections.

Another element in the battle against these calls is artificial intelligence, which is a promising new weapon. Sometime ago, Bell Canada developed a solution using artificial intelligence to block calls that were confirmed as being fraudulent in the company’s network. We allowed them to do a trial. We approved the trial and, encouraged by the results of that 15-month trial, we approved an application by them to implement that technology on a permanent basis last December. To date, that application has blocked more than 1.5 billion calls at source, and they have been intercepted. That's 1.5 billion times you didn't have to answer your phone to hear something you didn't want to hear.

The CRTC is also working with the telecommunications industry to develop a process to trace calls back to their point of origin in the network. The industry conducted a trial that yielded positive results, and so we directed providers to begin the rollout of the process toward its full deployment. The intelligence that we will be able to gather by pinpointing the origin of nuisance calls will help improve our enforcement efforts.

Of course, we continue to oversee the National Do Not Call List. Canadians have registered more than 14.6 million numbers on the list since it launched in 2008. Complaints submitted through the list operator help to inform our outreach efforts and enforcement actions.

Our ongoing work with the industry, the Canadian Anti-Fraud Centre and the RCMP enables us to exchange information on nuisance communications. We are also in regular contact with a number of federal departments and agencies, including the Canada Revenue Agency, the Competition Bureau, Employment and Social Development Canada and the Communications Security Establishment. Through this engagement, we can warn Canadians of illegitimate campaigns in a timely way to help them avoid becoming victims of fraud.

This Committee is well aware, however, that the issue of fraudulent calls is not limited to Canada.

It's not just in Canada. It's a problem in many countries, particularly English-speaking countries. In the United States alone—I think I've shared these numbers with you before—it's estimated that there is something in the order of 2,100 robocalls every second, and something approaching 50% of those may be fraudulent.

In particular, we have established formal arrangements to share information and expertise and to provide investigative support with our counterparts in the U.S., the U.K., Australia, New Zealand and Japan.

Through all of these initiatives and with the help of industry and our domestic and international enforcement partners, we are making significant progress in protecting Canadians and restoring faith and confidence in the telecommunications system.

With that said, my colleagues and I will be happy to attempt to answer any questions you may have.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Scott.

Before we start, could you repeat the statistics you just mentioned?

[Ian Scott]

These change all the time. This is the U.S. statistic, but approximately—

[The Chair, Liberal, Joël Lightbound]

I think it was the number of calls per minute.

[Ian Scott]

It was 2,100 robocalls per second. Those are United States figures, but they're very proportionately similar in Canada. We have very similar patterns. Of those 2,100 robocalls, obviously a portion, in fact a slight majority, are legitimate telemarketing, but that means something close to 50% are fraudulent, so think of it as 1,000 calls a second being fraudulent.

[The Chair, Liberal, Joël Lightbound]

That's why, despite all these efforts, I still get a lot of these calls, and they just seem to be increasing in number.

Without further ado, I give the floor to Michael Kram for six minutes.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you very much, Mr. Scott and the witnesses from the CRTC, for being here today.

I should start by saying thank you for all the work you have done on this file. I think there is broad consensus among all parties that reducing fraud is a good thing for everyone regardless of one's political stripe.

I read with interest the report from the last time the subject came up. Based on my reading of the report, I got the impression that you've come a long way over the last decade or so, and I think that if someone started up a fraudulent call centre in, say, Regina, which is my city, and all of its victims were in Saskatoon, I would suspect there would be a very good chance that the fraudsters would get caught. I also read that a great number of the fraudulent calls originate overseas, which brought me to recommendation number 4 in the report, that these preventative measures should be included in future and ongoing free trade agreements.

Let's start with the do not call list. Can you elaborate on how the do not call list can or should be integrated with future free trade agreements?

[Ian Scott]

We should probably start by dividing up some things, and my colleagues will assist me.

Do not call really relates to telemarketing, and we have a set of rules around it. Then we have CASL, the anti-spam legislation, and that goes to other types of communications. So we have to watch the terminology.

What do not call does is establish a system in Canada for Canadians to put their phone number on a list so they will stop being called by legitimate telemarketers. We police that, and there's a large uptake. My colleagues can give you more specific statistics if you wish. I told you roughly how many numbers. In excess of 14 million Canadians have their number on it.

There's an exemption for charities and surveys. There's an exemption for political parties, which you granted yourselves. We do get lots of complaints asking how come people still get calls from.... We will leave that alone. It is the will of Parliament, and that is fine, of course, but that's not the problem.

The problem is those who either decline—legitimate telemarketers who fail to sign up—or illegitimate ones. The first case we pursue. We get complaints. We identify them. We track them down. Either they sign up or we fine them, and we're pretty good at that, I'll be honest.

The second case is the illegitimate ones. They're not playing.... They could be foreign or domestic. That brings us into that other category, in which lots of activities are coming from abroad. What we do there is not so much an issue of free trade agreements. It's an issue of, first, establishing co-operative mechanisms with other countries, which we've been doing—and I recently revised and modernized agreements with both the United States and Australia to enhance our co-operation—and second, having initiatives like call traceback, which I referred to in my remarks, that will help us figure out where these calls are coming from.

After that, if they're coming from a particular part of the world, then we have to pursue that with foreign officials, and it goes to our enforcement partners and the Department of Justice. At that point it gets more difficult and is in fact largely out of our hands.

[Michael Kram, Conservative, Regina—Wascana, SK]

Let's start with the United States. Is Canada's do not call list currently being shared with telemarketing firms in the United States, and is there a reciprocal agreement in place so that Canadians have to abide by American laws as well?

[Ian Scott]

Steven, do you want to speak to that?

[Steven Harroun, Chief Compliance and Enforcement Officer, Canadian Radio-television and Telecommunications Commission]

Absolutely, and that's a really great question.

I'll go back for a little bit of clarification. Fundamental to the list is that telemarketers have to buy the list of numbers to ensure they don't call Canadians, so I think you're right. Most Canadian companies that are legitimate will purchase that list. They will not call people on that list. That's for anyone calling Canadians.

We do have American telemarketing firms that register on the list. We have foreign telemarketing companies. Last year there were, I think, 943 telemarketers registered to purchase the list. I'll do my rough math here. About 50 of those are outside of Canada, most of them in the U.S., but we also get some from the U.K. and some from Morocco. They are aware of the rules and they've purchased the list.

The same goes for Canadian telemarketing firms. They have to abide by those rules in the U.S.

[Michael Kram, Conservative, Regina—Wascana, SK]

The recommendation in the report was that these measures be included in current and future free trade agreements, but would you suggest that other treaties outside of free trade agreements might be more effective, or what do you think would work better?

[Ian Scott]

I think it may be outside of our area of expertise to determine how best to do it. The way we are pursuing it is through bilateral and potentially multilateral agreements between similar agencies. The regulatory authorities in those other countries—and I recognize that our answers are going quite long. I'm sorry. I don't want to use up all of your time. I'll beg the indulgence of the chair for a second.

We will work with those agencies, and there potentially could be some room—I've been having discussions with some of our partners—to make some of those arrangements multilateral, because frankly this scourge is expanding. North America was sort of a hot spot for many years, and we see it growing particularly quickly in other English-speaking countries, but it's also growing in Asia, French-speaking countries and so on, so we're working with those partners, and that's where our focus has been.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you.

We'll now turn to MP Dong.

[Han Dong, Liberal, Don Valley North, ON]

Thank you, Chair.

Mr. Scott, it's good to see you.

Welcome to the other witnesses as well.

I want to quickly follow up on Michael's question. You talked about how telemarketers get their list, but what we're focusing on here are criminals and not legitimate businesses. How, technically, would these criminal groups get access to this list and constantly update the list?

[Ian Scott]

Thank you for the question.

I'm not correcting you, but I get corrected by my staff all the time to make sure I don't refer to people as criminals. There are people engaging in activities—

[Han Dong, Liberal, Don Valley North, ON]

Suspects.

[Ian Scott]

—with malicious intent, but they're not criminals unless they're convicted of doing these things. I guess there's really a difference.

They're not using the list. The point is, when you get calls, whether from those using spoofed numbers or others who are ultimately engaging in fraud, they don't care about a list. They're using equipment—Alain, you can help me here—to simply randomly dial. The numbers are typically sequential. They'll sit there and say, “I'm going to dial everybody with a cellphone number beginning with 889”, and then they start dialing them all.

[Han Dong, Liberal, Don Valley North, ON]

Got it. The chair mentioned that since the pandemic we've seen that the number of calls, text messages and emails is on the rise. I'm really concerned about the newcomer group and more vulnerable populations such as seniors, because the callers are getting more clever. Whenever there is a new policy announced, they're very quick. The next day you get “do you want to access your CRA rebate?” or something like that, and they're very clever.

What have you done or what do you know about what the industry has done to protect the vulnerable population in Canada?

[Ian Scott]

That's a wonderful question. Thank you.

We do several things, and again I'll invite my colleagues to add.

I guess the first thing we do is obviously try to limit—

[Han Dong, Liberal, Don Valley North, ON]

Actually, can you give the committee some statistics, maybe later, on what resources you have spent protecting specifically the more vulnerable population? I have a few more questions.

You mentioned that you work with other departments of the government—RCMP and whatnot. I don't expect you to answer as to the resources they have dedicated to fight fraud calls, but how much has the CRTC and the telecom industry spent on an annual basis to fight fraud calls? Do you know if there's a number?

[Ian Scott]

I'll try to answer the two questions if I can.

First of all, our focus is obviously attacking the problem at its root using a variety of solutions with the carriers to try to limit the calls. That, as I've described, is the first course of action.

The second course of action—and you're right—is especially important for more vulnerable populations, new Canadians who may be less familiar with the system and authorities, elderly people and so on. We use educational tools. We work carefully with other departments. You mentioned the CRA, so during tax season we work with them to put out messages. We also have an intelligence branch that collects information, so we spot the latest trends and patterns and we share that information with law enforcement. We share that with the public through tweets and other means.

If I could go quickly to the last one, I'd have to take an undertaking with respect to numbers. We don't track it in that way. We don't keep numbers on how much we spend on intelligence gathering versus on getting customer complaints. Obviously we could provide you with statistics from the commission for Steven's group and his part of our budget, but we'd give you only macro numbers.

[Han Dong, Liberal, Don Valley North, ON]

Thank you, Ian.

The reason I'm asking this is that I think the public wants to know—they want a number—how much government agencies are spending to fight these scams and, on the accountability aspect, whether or not we're yielding the result that we're aiming for. If we don't have a target or we don't have a goal, it's really difficult to achieve anything.

You talked about working with the RCMP. For last year, do you know how many convictions came out of these investigations? When people report fraud and it's being investigated, what happens next? What's the process? How many convictions are there?

Then we can talk about whether or not there needs to be an amendment to the Criminal Code and whatnot. I don't even know how many convictions there have been. I haven't seen any on the news.