Email Marketing and CAN-SPAM Act

CAN-SPAM Act of the United States came into effect on January 1, 2004.

It legislates against email spamming and any other malpractice related to electronic marketing. Since 2004, so many high profile cases have been drawn and arrests made in connection with the Act. The very recent one carried a penalty of $2.6 million, the highest ever in the world of spam legislation. If your company does email marketing to target new audience, then you should examine the Act and its effects in your marketing. Moreover, if you have a partner company that does the email-marketing job for you, then

you might want a closer look at how they are doing it. People shouldn’t mistake that they “can spam” with the help of the Act, as some of the media twist it. It expands to Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003. This article looks into the basics of the Act, and finds legitimate and effective ways to do the email marketing.

The CAN-SPAM bill was passed by the end of the 2003, and on the first day of next year, it took full effect. The Congress passed the enforcement of the Act to the FTC (Federal Trade Commission).

Until the law enforcement of CAN-SPAM started in 2004, volumes of spam emails and unsolicited messages were bloating the inboxes of email users worldwide. So many consumers became victims of spamming, and it grew up to so big a nuisance, that it was long inevitable to enforce a law against it. The CAN-SPAM Act could dramatically reduce the overall spam rate in the United States and other countries. (Still, some sources quote that “Can Spam” law facilitated spamming, and the spam mails increased in number from the previous year, as the perpetrators realized that they “can legally spam” now.)

The following examples from the FTC show the effects of the CAN-SPAM Act:

MXLogic, an email spam filtering company recorded a 9 % decrease in spam in the year 2004.
AOL reported a whopping 75 % decrease.

These examples clearly show that the email spamming was less in 2004 than in 2003. Some high profile arrests and other related stories that happened since 2004 in connection with the act are recalled below (taken from related newspaper stories).

This incident is very recent (on January 23, 2008), in which the judge, David Coar of Illinois enforced Sili Neutraceuticals, LLC (based in Las Vegas) and its CEO Brian McDaid, a penalty of $2.6 million (the highest ever in connection with the Act) for violating the terms of the Act. They marketed Human Growth Hormone (HGH) related products, but made false claims through their emails. Ironically, the first violators of the Act were also marketing HGH.
Spammers, Jeremy D Jaynes and Jessica DeGroot got $1 million as penalty under the Virginia spam act, as reported by The New York Times.
The New York Times also reviewed the spamming done through consumer email networks of Microsoft, by a young entrepreneur, Levon Gillespie.
On January 17, 2007, The New York Times reported the legal action taken against a Mr. Jeffrey B. Goodin. According to the source, he defrauded the AOL customers into providing their credit cards. The penalty was not known in this incident.
Colorado passed their bill based on the CAN-SPAM Act on February 7, 2008. This is to legalize the electronic mail system within the state and bring back the legislation of email marketing under their jurisdiction (the legislation was removed from them when the CAN-SPAM Act “superseded” their spam law).
Since the Act came into effect in 2004, the FTC got nearly 500,000 complaints against a Detroit based company, Phoenix Avatar. The FTC investigated the complaints, and with the help of a district court judge, barred the company’s license and froze their assets. Another organization that was hit during the same time was Global Web Promotions. Spamhaus, which is an anti-spam organization, had already identified both of these companies as spammers. According to the sources, a whopping 390,000 complaints were registered with the FTC against Global Web Promotions.
Besides these, more than twenty cases have come up at various points of time since the law’s inception. Though so many litigations took place, spam still is an overwhelming issue. In addition, more and more companies are popping up with newer ways to spam (with or without compliance with the law).

The Crux of the Law

The electronic mails should observe the following rules, as maintained by the CAN-SPAM Act.

1. The law prohibits false or misleading header information: The law asserts that the header of an email, which is the information about the sender and the domain, from where the message was sent, identify the sender clearly, and never mislead the recipient in anyway. (For instance, how many times have you received emails, supposedly from Microsoft or MSN, and included a return address in a commonplace Yahoo domain?)
2. Accurate and relevant subject line: If the subject line of the message is overtly promotional, deceptive, and different from the subject matter, then the receiver should know better. Report the sender.
3. An opt-out method: The law gives the recipients a method to opt out of the future emails from the sender. If the customer wishes no longer to receive messages, then (s)he should be able to “unsubscribe” from the mailing list. According to the law, the opt-out requests should be processed within thirty days, and once processed, a maximum of ten business days are allowed to completely stop sending further messages. Also, the firm shouldn’t distribute the opted-out email addresses to any other entity.
4. Classify the commercial email as advertisement: The law requires the email to be catalogued as advertisement, if it is sent out with anything persuasive in its contents.
5. Postal address of the sender should be present in the email body: The law maintains that the commercial emails carry the valid, verifiable physical address of the sender in the email message.

The penalty put forth by the law in the beginning was up to $11,000, although the latest cases carry far more than that.

How Spammers Get Your Email Addresses

You should know that the spammers send hundreds of thousands (sometimes millions) of emails in one stretch. They send out all these emails to real people out there. There are more than twenty million email users within the US alone. But to send emails to people, the spammers have to know the email addresses of the recipients. The question is how they get all these addresses. Here’s how:

Email Harvesting:
Email “harvesting” is the process of mass-collecting email addresses from websites. This is done with scanning programs called email harvesters or spam bots. They are the programs that can unearth your email addresses from the websites, to which you previously posted them. You might remember the occasions when you posted your email address in blog comments, social networking sites, book marking sites, etc. Spam bots can access and isolate email addresses from these sites. They do this by searching for the “@” sign in the site contents and backtracking from it to the last space character. From this point, it will extract the text, until the next space character, forming a complete email address. In addition, they can extract addresses from the “mailto” tag (used to create an email hyperlink) within the HTML code of the document.

Dictionary Attack:
Highly prolific email providers like Gmail, Yahoo, and MSN Hotmail are the haunts of spammers. Their pieces of software can combine permutational modifications of common western names with one of these domains. Ninety per cent of the time, the resulting email address will be extant. For instance:

The spammer can target a common name like “Peter” and create an email address with combinations like, “peter.smith@gmail.com,” “peter_01@hotmail.com,” and many more like that.

Spam Zombies:
In many cases of spam, it is identified that the return address is that of an unsuspecting, genuine third party, victimized by the spammer. This happens when the spammers attack their mail servers and take control over their email lists; the spammer can now discharge millions of emails from these servers (with their malicious code containing script for mass mailing). Since the return address is that of the victim, millions of emails returning without recipients will choke their email servers. Such attacked mail servers and networks go by the name, spam “zombies”.

Besides these, spam protection agencies have identified so many other methods. The following are some of the other common methods for that:

1. Buying email lists from other spammers and unethical business owners
2. Compilation of email addresses form IRC rooms (Internet Relay Chat Rooms)
3. Extracting the email addresses using scripting languages like JavaScript directly from the user’s web browser
4. Using domain contact points to gather email addresses
5. From yellow pages
6. By luring the website visitors to submit their email addresses with such decoys as free stuff, tutorials, etc.,

Using these methods, the spammers are more likely to get your email addresses than your friends are.

As of now, the law empowers only the corporations to fight the spam, and not individuals. Still, the FTC accepts individual spam complaints. You can forward the spam messages you receive directly to the FTC’s unsolicited complaints email address, which is spam@uce.gov. Alternatively, customers can browse to the FTC website and get their complaints registered there. These registrations are added to the Consumer Sentinel database (though a direct action is not taken right away) of the FTC and are used to do any litigation in the future against the alleged entity (based on the number of complaints and other factors).

Tips for Email Marketers

Spamming your customers will only get you blacklisted, if not litigated. So the best method to promote the company’s products is not spamming at all. It is honest, direct marketing with your customers. The companies that do email marketing should follow these tips, which would enable them to approach the consumers in the most successful way.

1. Create your email lists in a very responsible manner, and never try dishonest methods like email harvesting for that. To gather email addresses of your potential customers, politely ask them to be included in the mailing lists for future products or advertisements. Use your website content to attract customers, but never use any method that you consciously realize as deceptive.

As a way to add to the list, enquire the customer whether they wish to be included in the email list for information on other products from the company or on any modifications and improvements to the current products and services. Make it clear to the customer what sort of emails they will receive and how often. Respect the customer’s privacy, and make it clear in your website. Professional firms articulate a privacy policy for this purpose. The company should make the terms of the policy clear to the customer. This would enable the customer understand and realize the level of professionalism of the firm they are dealing with.
2. Secondly, it goes without saying that you should never send unsolicited emails. Always use the consent of the consumers to send emails to them. As I said earlier, get the consent in a proper manner. You should keep your emails to the point, and identify the subject clearly in the subject line of the email. The customer shouldn’t feel that he received an email he didn’t give consent to.
3. Follow the rules, and give exact physical address of the company’s location in the email; label the email if it is an advertisement.
4. Avoid using extreme promotional material or unrealistic promises and rely on helpful suggestions and realistic content. For instance:

Loads of Free Money! Sign up now and receive an account into the new data entry system! You could earn 1000$ per hour.

An advertisement like this would be poorer when compared to:

We have devised a new tax saving investment scheme. Our experts have helped hundreds of our clients save substantial amounts in their tax. Please find out more in our website.

Clearly, the second one seems more realistic and helpful (even without proper statistics and more detail). An average consumer is more likely to notice the apparent unlikelihood of the first advertisement than ponder pursuing it (even if it is genuine).
This in itself clearly shows the importance of being honest in your advertisements. If you deliver what you promise, then not only will the consumers tend to come back to the company, but also pervade the word of mouth about the professionalism and reliability of the firm.
5. Have good grammar and style in your emails. I needn’t stress the importance of this point any stronger. The content you deliver through your emails creates the first and best impression about your company in your consumers. So, it is imperative that you hire a professional to create text content for your website as well as emails. The consumers have no other means to assess the company at the start of the business than the correspondence. So, build a reputation through text. This has a very deep reach than you think. Not only the grammatical and stylistic correctness, but also the politeness plays an important part.

That concludes the best practices you can follow when it comes to email marketing. Email marketing is one of the best tools out there to promote your business, and it is second only to Search Engine Marketing (SEM). Millions of users depend on emails for their communication purposes, and you can reach down to a huge populace through email marketing. But when you start marketing, you should hire a responsible firm that abides by the law and doesn’t indulge in any malpractice. Otherwise, one slip from your partner could get you into trouble. Your company may not be legally affected, but its reputation will. It is extremely difficult to build a good clientele without honesty and politeness from your side.