Spam (Can Cost) A Lot!

Spam e-mail folder

By: Brian J. Meli

The practice of sending unsolicited emails en masse to prospective customers goes almost all the way back to the dawn of the digital age.  But federal regulations governing the practice have only been around for about a decade.  The CAN-SPAM Act, or The Controlling the Assault of Non-Solicited Pornography and Marketing Act, in unacronoymed form, was passed in 2003 in an effort to harmonize a patchwork of inconsistent state laws and bring order to an increasingly chaotic practice.

The most profound thing the legislation did was define the difference between spam (illegal) and legitimate email marketing (legal).  It also clarified that solicited emails, (a customer consents to be put on a mailing list), and transactional emails (emails that facilitate an agreed-upon purchase, or provide updates about an ongoing one) were not subject to regulation.

The good news is that the difference between spam and non-spam is now fairly clear, making compliance with the law relatively straightforward. The bad news is that with penalties of up to $16,000 per email, non-compliance can be catastrophic to a small business. With the stakes so high, every mass email effort—or small-scale email effort for that matter (the law does not set minimum quantity requirements)—should be examined carefully by a qualified attorney prior to executing. Advertisers, however, can save a lot of time and legal fees on the front-end simply by following some basic do’s and don’ts as they develop their email tactics.

The following guidelines, promulgated by the Federal Trade Commission, should be referenced early and often when developing any email marketing tactic. To view the guidelines in their entirety, visit the FTC’s Bureau of Consumer Protection.

The Do’s and Don’ts of CAN-SPAM:

  • DO NOT use false or misleading header information. The “From,” “To,” and “Reply-To,” fields, and the originating domain name and email address must be accurate and identify the person or business who’s sending the message.
  • DO NOT use deceptive subject lines. The subject line must accurately reflect the content of the message.
  • DO identify the message as an ad.  You must clearly and conspicuously disclose that your message is an ad.
  • DO tell recipients where you’re located.  Your message must include your valid physical postal address.
  • DO give recipients instructions on how to opt-out of receiving future emails from you.  Your message must include a clear and conspicuous explanation of how the recipient can opt out of getting email from you in the future.
  • DO honor opt-out requests promptly.  Any opt-out mechanism you offer must be able to process opt-out requests for at least 30 days after you send your message, and you must honor a recipient’s opt-out request within 10 business days.
  • DO NOT fail to monitor what others are doing on your behalf.  Even if you hire another company to handle your email marketing, you can’t contract away your legal responsibility to comply with the law. Both the company whose product is promoted in the message, and the company that actually sends the message, may be held legally responsible.

As you can see, some of these guidelines are black and white, while others leave room for interpretation. What constitutes “clear and conspicuous” or “misleading” for example, leaves considerable room for interpretation.  Even the fundamental question of whether an email falls under CAN-SPAM can be a point of disagreement, as the definition of what constitutes a “commercial email” isn’t always clear.

Another reason to proceed with caution is that CAN-SPAM only covers U.S. email recipients. More stringent laws can and do apply to foreign recipients.  For example, the EU, in general, has much stronger consumer protection laws than the U.S. does.  Even if you don’t do business outside the U.S., if you’re doing business with foreign entities located within the U.S., it’s conceivable that a bulk email distribution list could include foreign email addresses that fall under the purview of foreign laws.

There are hidden dangers closer to home, too. While, officially, CAN-SPAM pre-empts any pre-existing state anti-spam statutes, there are several exceptions to that rule, which create ambiguity. For example, states still have the power to regulate commercial activity via other means, and so commercial emails can still fall under the scope of state laws that weren’t specifically enacted to address spam, but which may impose additional requirements on senders nonetheless.

For these reasons and many others, advertisers would be well-served to go beyond the federally mandated requirements of CAN-SPAM, and fully conform to generally accepted industry best-practices. The Direct Marketing Association (DMA), an industry trade organization that assists advertisers with self-regulation, disseminates its Guidelines for Ethical Business Practice, which cover a range of direct marketing activities, emails being just one of them.  The standards espoused by the DMA mostly mirror the FTC guidelines, but in some cases they exceed the minimum statutory requirements of CAN-SPAM; and while it’s not required by law, following the DMA Ethical Guidelines is widely considered prudent business practice.

Not to get lost among all these words of caution though is the fact that the CAN-SPAM Act was passed, in large part, to replace overly oppressive state laws that impeded lawful commerce. Its purpose was to help advertisers understand what they could do, as much as it was to establish what they couldn’t do. Accordingly, CAN-SPAM shouldn’t discourage businesses from engaging in legitimate email advertising. Email tactics have been and will continue to be powerful components of integrated marketing efforts. The key is understanding how to engage in them legally and ethically. And by following the FTC guidelines, considering the opinions of the DMA, and consulting a legal expert before hitting the send button, companies can do just that.

The content of this blog is intended for informational purposes only. The information provided in this blog is not intended to and does not constitute legal advice, and your use of this blog does not create an attorney-client relationship between you and Brian J. Meli. Under the rules of certain jurisdictions, the material included in this blog may constitute attorney advertising. Prior results do not guarantee a similar outcome. Every case is different and the results obtained in your case may be different.

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