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18 Aug 2008

What do I need to know about the FTC’s 2008 updates to CAN-SPAM?

What do I need to know about the FTC’s 2008 updates to CAN-SPAM?

In May 2008 the Federal Trade Commission(FTC) released its Statement of Basis and Purpose and Final Discretionary Rule (“final Rule”) on the CAN-SPAM ACT. This statement contains four new rules, and also contains some clarifications and guidance to the text of the original act in the form of the Statement of Basis and Purpose (SBP). You can read the FTC press release, and you can find the full text of the update here. The new rules go into effect on July 7th 2008.

While we cannot provide legal advice, we feel it is important to provide you with our interpretation of how the federal law may affect you. This article covers the highlights of the FTC update, and is not a full analysis of how it may apply to you. If you believe you may be affected, you should consult with your own attorney. Note also that since the rules are new, it’s likely that the interpretations will evolve over time as the industry acquires more experience with implementations.

Highlights for Constant Contact Account Holders

If you are adhering to our current terms and conditions, making sure that your messages contain a valid company name and physical address, and are not working with affiliates or 3rd party advertisers, there are probably only two things you need to look at:

  • First, you should review the From: address and From: name you are using in your emails. At least one and preferably both of these should be clearly recognizable as belonging to your organization.
  • Second, make sure you are not “procuring” the forwarding of your campaigns by offering any kind of incentive ( e.g. coupons, discounts, t-shirts, etc.) to your recipients. Forwarded messages that contain incentives to forward will be non-compliant under CAN-SPAM because they will be considered commercial messages and will not contain the required opt-out mechanism. See below for more details.

However, as each situation is unique, we encourage you to read on to verify that none of the other updates apply to you.

Four new rules were added:

Four new rules were added:

  • There were some modifications to the definition of “sender” in order to clarify the required CAN-SPAM compliance when there are multiple advertisers in a single message. In general, it clarifies that the From: address visible to your recipients should be clearly recognizable as belonging to your organization. In addition, if you work with affiliates or you have 3rd party advertisements in your email campaigns you should review the new rule provisions relating to the definition of sender as it relates to multi-sender emails.
  • The opt-out mechanism must not be complicated: “an e-mail recipient cannot be required to pay a fee, provide information other than his or her e-mail address and opt-out preferences, or take any steps other than sending a reply e-mail message or visiting a single Internet Web page to opt out of receiving future e-mail from a sender”. (The Constant Contact opt-out mechanism is compliant with the new guidelines.)
  • Commercial mailers may now use a valid P.O box as the required physical postal address in their messages, as long as it is valid and meets USPS registration guidelines.
  • The term “person” has been defined as “an individual, group, unincorporated association, limited or general partnership, corporation, or other business entity.” This is intended to clarify that CAN-SPAM’s obligations are not limited to natural persons.

If you are a single organization sending email on your own behalf and do not publish ads from third parties in your emails, then the new rules will likely have little impact on you unless your opt-outs do not comply with the new stricter opt-out guidelines. If you work with a third party (other than Constant Contact) that manages your opt-outs for you, you should consult with them to make sure that their mechanism will comply with the new rule provisions by the July 7th deadline.

Additional FTC Guidance:

The Final Rule also provides some additional guidance, the Statement of Basis and Purpose, on aspects of the Act that it does not explicitly modify in the final rule. Although these items are not officially mandated, they give guidance on how the FTC is likely to interpret applicability and compliance, and in that context should be given careful consideration.

  • The FTC clarifies that forward-to-a-friend mechanisms, which have generally been treated as exempt from CAN-SPAM because they are 1-to-1 messages from the original recipient to their friend, may in fact be subject to CAN-SPAM if the originator of the message “procures” the forwarding or if the forwarded message is stored in any way by the forwarding system.
    • A message has been “procured” if “the seller offers money, coupons, discounts, awards, additional entries in a sweepstakes, or the like in exchange for forwarding a message”.
    • Because most forward-to-a-friend mechanisms are not set up to include opt-out links that would make the message CAN-SPAM compliant and enable the final recipient to opt-out of future messages from the original sender, this means that any forwarded message whose forwarding has been “procured” would make the original sender non-compliant under CAN-SPAM.
    • To ensure you’re not caught by this clarification, you should make sure that you’re not offering any incentives in the content of your email campaigns that encourages your recipients to forward them. For example, “forward to 10 friends and get a 10% off coupon”, or “get a free t-shirt” would likely classify your forwarded message as commercial and thus subject to CAN-SPAM.
  • There is fairly extensive guidance given on the definition of a “transactional or relationship message”. The FTC decided not to exempt entire classes of messages from CAN-SPAM, but rather requires they be considered on “a case-by-case basis depending on the specific content and context of such messages”. If all of your communications to your recipients are already CAN-SPAM compliant, you don’t need to worry about these clarifications; if you do treat some of your communication as transactional you probably want to look at this section in more detail to ensure that you’re not impacted by the clarifications.
  • The FTC has decided not to alter the time limit (10 days) for honoring an opt-out request; in addition, it reaffirms that there is no time-out on an opt-out request, i.e. that it may only be over-ridden by a subsequent explicit opt-in request.


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