CAN-SPAM Act is Not Dead
In the current landscape, significant compliance concerns often revolve around issues like the TCPA, “junk fees,” and fair lending, among others. Rarely do we encounter substantial supervisory guidance or case law regarding email marketing and CAN-SPAM Act violations. However, this week, the FTC issued a poignant reminder that the CAN-SPAM Act is very much alive.
Specifically, the FTC alleged that Experian Consumer Services (“ECS”), a company offering a platform allowing consumers to freeze or unfreeze their Experian credit reports, required consumers to create a free account to access the service. ECS then utilized the email addresses collected during account creation to send additional emails to consumers, promoting other products and services related to credit and identity tracking or monitoring. The FTC rejected ECS’s explanation that these emails were about account changes, deeming them clearly promotional rather than transactional under the CAN-SPAM Act. Consequently, the FTC accused ECS of violating the CAN-SPAM Act by not including an “unsubscribe” link and sending messages to individuals who had opted out of receiving personalized insights and offers. Pending approval by the U.S. District Court for the Central District of California, ECS has agreed to a proposed consent order that includes a $650,000 penalty and a prohibition on sending future commercial messages lacking a clear opt-out notice and link or email address.
This case serves as a powerful reminder that while complying with the CAN-SPAM Act is generally straightforward, attempts to circumvent its requirements can lead to severe consequences. Violations of the Act can incur penalties of up to $50,120 per email. Marketers should bear in mind that if an email’s “primary purpose” is commercial, it must adhere to certain guidelines:
- Refrain from using deceptive subject headings
- Include a visible and accessible opt-out link or address
- Clearly identify itself as an advertisement
- Provide a clear opt-out notice
- Feature a valid physical postal address of the sender.
Additionally, sending commercial emails to individuals who have opted out is prohibited.
It’s important to note that an email can be considered commercial even if it contains transactional or relationship-related content. Therefore, if sending a “mixed purpose” message to a consumer, the sender should ensure that the subject line emphasizes the transactional or relationship aspect and that this content precedes any commercial messages.
Now is an opportune time for those involved in marketing to revisit the various definitions and examples outlined in the CAN SPAM Act and its implementing regulations for “commercial messages” and “transactional or relationship messages.” This will help prevent your marketing endeavors from veering off course, similar to the situation with ECS.