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Does Your Email Marketing Comply with Federal Law?

Operations

Does Your Email Marketing Comply with Federal Law?

Updated: Dec 13, 2019

Does Your Email Marketing Comply with Federal Law?

Does Your Email Marketing Comply with Federal Law?

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:

What messages are covered by 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.

How can I make sure my email marketing campaign complies with the CAN-SPAM Act?

To make sure your marketing emails comply with the law, make sure these steps are taken:

  • Don’t be deceptive – The email headers, domain names, and subject lines must be accurate and not deceptive. The content must clearly identify the message as an advertisement.
  • State your location – Emails must include a valid postal address in the message body. This gives your customers another way to contact the business and shows that the message is coming from a real company.
  • Let recipients opt out – Messages must contain a clear statement of how recipients can opt-out or unsubscribe from your mailing list. When opting out, you cannot charge a fee, ask for any personally identifying information beyond an email address, or make the recipient take any step beyond replying to an email or visiting a single website page.
  • Honor opt-out requests, and do it promptly – You must honor a recipient’s opt-out request within 10 business days. Additionally, the opt-out mechanism in the email must be able to process the requests for at least 30 days after the email was distributed. Once a person is unsubscribed, you cannot transfer or sell their email addresses, even in the form of a mailing list.
  • Make sure third-party email services comply, too – The law does not differentiate between a third-party email service and the business that is promoted in the email, so if you’ve employed a third-party email marketing service, make sure they follow the law’s requirements.

How do I identify my message as an advertisement under the law?

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.

What happens if I violate the CAN-SPAM Act?

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:

  • Harvesting email addresses or generating them through a “dictionary attack,” the practice of sending emails to addresses made up of random characters with the goal of reaching valid email accounts;
  • Accessing someone else’s computer to send spam without permission;
  • Relaying or retransmitting multiple spam messages through a computer to mislead others about the origin of the message;
  • Using false information to register for multiple email accounts or domain names; and
  • Taking advantage of open relays or open proxies without permission.

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

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.

Tags: Operations

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