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Updated: March 27th, 2020
As a small business owner, you likely rely on email to communicate with customers. You’ve probably studied how to craft an attractive email campaign to convert subscribers into sales. But have you given any thought to whether your emails are compliant with federal law? With the amount of spam emails you likely receive every day, you may have assumed that there is no regulation in this space, but there are specific laws that apply to commercial email messages.
Enacted in 2003, the CAN-SPAM Act sets forth requirements for emails and establishes penalties for violations. Each email in violation of the law can result in a lawsuit or hefty penalty, but luckily compliance with the law is simple.
Here is what your small business needs to know about email marketing and the CAN-SPAM Act:
The CAN-SPAM Act covers emails that have the primary purpose of communicating commercial advertisements or promotions of a commercial product or service, including messages that promote content on commercial websites. The law does not apply to “transactional” or “relationship content” emails, which facilitate an already agreed-upon transaction or provides an update about an ongoing transaction.
To make sure your marketing emails comply with the law, make sure these steps are taken:
The CAN-SPAM Act does not require senders to use specific wording to identify commercial emails as advertisements. The law provides flexibility in this regard, as long as the advertising content is clear and conspicuous.
The CAN-SPAM Act does not give consumers the right to file an individual lawsuit against the spamming company, but they can forward the offending email to the Federal Trade Commission (FTC). The FTC has the authority to sue your business and impose hefty penalties. For each email sent, your business can face a fine of up to $16,000, which, for some businesses, could be devastating.
The CAN-SPAM Act also provides for criminal penalties, including imprisonment, for certain aggravated violations, such as:
Email is a highly valuable marketing channel, but only when it is used appropriately. Protect your business by ensuring your email communications are compliant with the law. For more information on the CAN-SPAM Act, check out the FTC’s CAN-SPAM Act: A Compliance Guide for Business.
Michael Jones is a Senior Editor for Funding Circle, specializing in small business loans. He holds a degree in International Business and Economics from Boston University's Questrom School of Business. Prior to Funding Circle, Michael was the Head of Content for Bond Street, a venture-backed FinTech company specializing in small business loans. He has written extensively about small business loans, entrepreneurship, and marketing.