Canada: Focus on Privacy - Asking Customers for Personal I.D.

Last Updated: March 29 2006
Article by Anneli LeGault

Canadian Tire stores, and in fact Canadian retailers in general, lose significant amounts of money every year due to fraudulent returns of merchandise. For example, stolen goods may be returned, netting a 100% profit to the thief. Retailers have found that requesting personal information and proof of identity can help to reduce fraud. However, customers in British Columbia and Alberta seeking to return goods for a refund have filed complaints under the Personal Information Protection Acts of the two provinces concerning the amount of personal information collected during the refund transaction.

In British Columbia, a customer provided the sales receipt involved in the original purchase and was then asked for her name, telephone number and date of birth. She filed a complaint concerning the amount of personal information requested, although Canadian Tire did provide her with a refund.

The B.C. Information and Privacy Commissioner investigated the complaint and carefully reviewed the Canadian Tire store’s procedures. The Commissioner concluded that the Canadian Tire store provided notice of the purpose for its collection of personal information through the notice of collection posted at cashier stations, the written notice on the front and back of the sales receipt, through its privacy policy and through the oral notice that store employees gave to the customer when the return transaction was initiated. He found that the notice was just barely adequate, as he felt that identifying the purpose as "to prevent fraud" should actually be clarified further.

He also concluded that the personal information being required was necessary to conclude the transaction.

However, the Commissioner objected to the fact that the personal information was retained on the computer system indefinitely. While the personal information collected was not of a sensitive nature, there appeared to be no legal purpose to require indefinite retention. Customers were also told that the information may be used to contact them in case of an error in the refund and to inquire whether they have experienced any problems in relation to the refund. He did not find that the use of personal information for customer satisfaction followup was necessary for the supply of a product or service. He required Canadian Tire stores to make it clear that a customer is not required to provide personal information for the purpose of determining customer satisfaction. He also found that the store in some cases asked for photo identification to confirm identity but the store does not record the personal information from that identification. He required the retailer to destroy the personal information which has been collected as soon as it is reasonable to conclude that the purpose for which it was collected is no longer being served. He also required the store to prepare a retention schedule respecting personal information.

Two Canadian Tire stores in Alberta also received complaints about their refund practices. However, these investigations focused on the collection of drivers’ licence numbers. The practices of the two stores varied. The Calgary store asked for name, address and telephone number and asked the individual to confirm identity with photo identification. This personal information was retained in some cases. The practice at the Sherwood Park store was to collect name, address and telephone number from the customer and then to ask for picture identification such as a driver’s licence to confirm identity. However, this information was not stored in the store’s system.

Both stores agreed that simply authenticating and confirming the identity of the individual returning goods is sufficient for their loss prevention purposes. The Office of the Alberta Information and Privacy Commissioner concluded that this was a concession by the stores that collection and retention of drivers’ licence numbers is not necessary for the business purpose of deterring fraud. The Office concluded that the Calgary store had contravened the Personal Information Protection Act by requiring customers to consent to collection of personal information that was not necessary.

The Calgary store agreed to stop collecting and recording drivers’ licence numbers. The store agreed to record only that the name and address had been confirmed with photo ID, recording the type of photo ID reviewed by the staff but not recording the driver’s licence or other particulars of the ID itself.


A lot of practices we follow are simply followed for historical reasons. Go back and examine the type of personal data your company requests from consumers, suppliers, customers and clients. Examine the purpose for the collection and then re-evaluate the type of data being collected. Is it directly linked to the goal and is it truly necessary? Employees and members of the public are understandably far more sensitive than previously about protecting their personal information.

Storing Data In The United States

The Office of the Privacy Commissioner of Canada has received many complaints from Canadians concerned that their personal information resides on servers in the United States or is otherwise stored in that country. Due to the terms of the U.S. PATRIOT Act, this means that the personal information is subject to access by the FBI under the Foreign Intelligence Surveillance Act. The FISA Court can issue secret orders allowing disclosure of personal data to the FBI. The organization subject to the order is prohibited from disclosing that the FBI has sought or obtained the personal information.

The Privacy Commissioner has issued its first ruling on the U.S. PATRIOT Act: Case Summary #313.

Since 1994, CIBC has had a contract with a U.S. based data processing company, which provides services relating to authorization of payment transactions, risk assessment and fraud monitoring. All of the personal information provided by VISA credit card holders is entered into the U.S. company’s software system.

In late 2004, CIBC VISA customers received a Notice of Change to their CIBC VISA cardholder agreement. The agreement notifies the cardholders that their information may be processed and stored in the United States, and U.S. governments, courts, law enforcement or regulatory agencies may be able to obtain disclosure of the cardholders’ information through the laws of the United States. The agreement goes on to state:

"I acknowledge and agree that the…paragraphs above constitute prior written notice to me of, and my consent to the collection, use and disclosure of my personal information as described above."

There was no right to opt out provided to cardholders.

The Privacy Commissioner’s office reviewed the Bank’s contract with the U.S. based third party.

The agreement set out detailed requirements regarding the safeguarding, confidentiality and security of customer account information. The contract affirmed that the Bank owned the data that is processed by the service provider, that the service provider is to maintain safeguards to protect that data and that the Bank retains a right of access and audit. The third party service provider’s security policy included administrative, technical and physical protections to safeguard against unauthorized use, modification, copying, access or other unauthorized processing of the data. All information and data transmitted between the Bank and the service provider was encrypted and transmitted through a dedicated transmission line.

The Privacy Commissioner did not find any of the complaints to be founded. The Privacy Commissioner concluded:

  • A Canadian organization that outsources the processing of personal information to a U.S. company cannot prevent its customers’ personal information from being lawfully accessed by U.S. authorities.
  • At a minimum, a Canadian company that outsources information processing to the United States should notify its customers that the information may be available to the U.S. government or its agencies. The Canadian organization must have provisions in place to ensure a level of protection of personal data that is comparable to the level of protection required by PIPEDA.
  • The Bank had complied with the legislation by informing its customers about its policies and practices and by entering into a contract with the U.S. company that provides guarantees of confidentiality and security of personal information.
  • Companies are not required to provide customers with a choice of opting out where the third party service provider is offering services directly related to the primary purposes for which the personal information was collected.

In this case, CIBC had used contractual means to provide a comparable level of protection while the information was being processed by a third party. As well, CIBC had made readily available to customers specificinformation about its policies and practices relating to the management of personal information. The Privacy Commissioner’s office has made it clear that it cannot prevent outsourcing to the United States where the principles of PIPEDA are met. However, great care needs to be taken by any organization storing data in the United States, whether with an outsource partner or affiliate. It also appears from this ruling that where the services being provided by the American company are not directly related to the primary purpose for which the information was originally collected, the Canadian organization will probably have a duty to allow customers to opt out of the arrangement.

Further rulings on point are pending at the Office of the Privacy Commissioner. We will report on further developments in this area as they arise. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions