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Technology: What You Need To Know About Complying With CAN-SPAM Act
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October 2011
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Technology: What You Need To Know About Complying With CAN-SPAM Act
The CAN-SPAM law has been around since 2003. Designed to be friendly to Internet business efforts, it was passed to stop marketers from using fraudulent or misleading representation to hook customers, and to discourage senders from appropriating email addresses from sources that are not their property – such as Internet Server Provider email directories. Business owners must make sure that in-house e-marketing is compliant with the law and that any third-party marketing firms they use are CAN-SPAM compliant.
First, understand which practices are considered criminal offenses and thus prohibited by law. Other practices might fall under the undesirable category and will not put business owners at risk of legal action – but they will likely alienate current and prospective customers.
The Law
CAN-SPAM defines spam as email whose major purpose is to market a product or service. The law doesn’t forbid email marketing or prohibit businesses from sending unsolicited emails, but it does aim to protect recipients from fraud and gives them a means to opt-out of electronic mailings. The CAN-SPAM Act is enforced primarily by the FTC and the criminal provisions are enforced by the U.S. Department of Justice – though other agencies have secondary enforcement powers. The following misrepresentations and fraudulent practices are viewed as criminal offenses:
- Using a hijacked computer to send multiple spam emails
- Sending multiple emails using Internet Protocol addresses that the sender represents falsely as being his/her property
- Disguising the source of the emails by routing them through other computers to deceive the recipients as to their origin
- Sending out communications via multiple mailings with falsified information in the header
- Distributing multiple emails through various email accounts obtained using falsified account registration information.
The above may be obvious red flags when it comes to sniffing out illegal practices, but the law requires legitimate marketers to be conscientious about several other key aspects:
- Avoid any transmission information that might mislead recipients. The subject line must point back to the initiator of the email – it cannot be disguised. Similarly, the from line must be accurate, too.
- Recipients must be given the option to unsubscribe or opt out from your mailings. If they do so, email marketers must remove them from their lists within 10 days.
- The physical address and a valid postal address must be included in the email (P.O. Box addresses are not acceptable). If the emails are sent out by a third party – such as a marketing firm – the address of the individual or business whose products or services are being promoted must be included.
- If you are sending out unsolicited commercial emails, you must state that the email is an advertisement or a marketing solicitation. Recipients who have signed up to receive commercial messages from you are exempt from this rule.
- Transactional emails involving ongoing customer relationships are not regarded as spam under the present laws. Transactional emails are those that contain delivery information, warranty or recall information, account notices or product updates or upgrades.
- Newsletters sent via email may be considered transactional, depending on their content. If the main purpose of the newsletter is to market new products and services, err on the side of caution and follow the regulations above that apply to unsolicited email.
- You must be scrupulous about how you acquire, maintain and share email addresses. You cannot share the email addresses from people who have opted out of your mailings with others. Similarly, you cannot purloin email addresses from sites and directories or randomly generate email lists for your own e-marketing efforts.
It might be tempting to entice your customers to open your emails, but your efforts must stay within the guidelines of the law. Relevant, timely, useful content will make your mailings stand out from the crowd. Aim for quality over quantity.
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These articles are intended to provide general resources for the tax and accounting needs of small businesses and individuals. Service2Client LLC is the author, but is not engaged in rendering specific legal, accounting, financial or professional advice. Service2Client LLC makes no representation that the recommendations of Service2Client LLC will achieve any result. The NSAD has not reviewed any of the Service2Client LLC content. Readers are encouraged to contact their CPA regarding the topics in these articles.
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