Welcome to Benchmark!

Hal Licino

Learning From Recent FTC Enforcements Under CAN-SPAM

Apr 14 2010, 12:22 AM by

Every email marketer should be intimately aware with the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, also known by the unfortunate tinned ham moniker of CAN-SPAM. The management of bidz.com has learned just how serious the Feds are in enforcing these regulations.
 

 

bidz.com Investigated For Failing To Honor Opt-Outs

In May 2009, the management of online jewellery retail site bidz.com received a Civil Investigation Demand for Information from the Federal Trade Commission (FTC) as part of its investigation of the company's email marketing campaigns. The FTC was investigating whether bidz.com had failed to honor unsubscribe requests from individuals on bidz.com’s email list.

Although the case was recently settled out of court, bidz.com did have to pay a cash settlement to the United States government for violation of CAN-SPAM statutes. Therein lies the lesson to email marketers. If you take any of the CAN-SPAM regulations lightly, they may come back to bite you in the bank account or worse. Each single email sent in violation of the regulations can subject your company to penalties of up to $16,000. Multiply that amount by the emails you sent last year, and you’ll see that the FTC is deadly serious about enforcement.

CAN-SPAM Has Sentenced Email Marketers As Far Away As Morocco

CAN-SPAM has shown its teeth in various FTC enforcement actions. The principals of Phoenix Avatar faced five years in jail for violating CAN-SPAM and an additional twenty years in prison for mail fraud. Many other convictions have been carried out, and the number of over-enthusiastic email marketers behind bars is growing. The long hand of the FTC even reaches offshore. Mr. Mounir Balarbi was tried in absentia and sentenced in a closed session, even though he resides in Tangier, Morocco.

Granted, the offenses that have triggered prison time have been primarily connected to pornography or snake oil sales, so the Feds are not heading to your office with a SWAT team because your unsubscribe link goes to a 404 Error page. But a legitimate, legal business can still suffer heavy consequences. The management of bidz.com faced a prolonged investigation lasting almost a year, which certainly affected its online reputation as well as stock market value. The shares of bidz.com traded for $4.34 in early May 2009 but plummeted to $2.67 by the following month, wiping out about $30 million in market capitalization. The exact amount of the cash settlement bidz.com had to pay the government has not been revealed, but it was most certainly punitive. In short, the lesson you can learn from the bidz.com episode was that you don't want to be in their position.

CAN-SPAM Is Essentially Good Online Business Policy

For reputable, conventional email marketers who are not trying to peddle illicit images or garlic extracts guaranteed to cure cancer, the restrictions of the CAN-SPAM statutes are relatively mild and fairly common-sense. According to the FTC, the primary basic requirements are:

Don't use false or misleading header information.
Don't use deceptive subject lines.
Identify the message as an ad.
Tell recipients where you're located.
Tell recipients how to opt out of receiving future email from you.
Honor opt-out requests promptly.
Monitor what others are doing on your behalf.
If You Violate CAN-SPAM, You're A Criminal

Although the "bUy V-i-A-g-R-a nOw" crowd violates all seven of those requirements with each email, responsible email marketers will realize that those are not restrictions as much as they are good online business advice. After all, if you have to resort to fudging your headers, lying in your subject line, hiding where you are, failing to allow recipients to opt out, and the rest of the rogue's gallery commandments, your primary interest is not in ethical business transactions anyway: You're a criminal and you deserve to be locked away from the rest of us.

Posted in Tips & Resources

Related Blogs

Comments

Georgia Christian

Nov 19 2010, 11:53 AM

Food for thought indeed. keeping on the right side of the law could save you money.