Consumer Alert
FTC lawsuit reminds businesses: CAN-SPAM means CAN’T spam
By
Seena Gressin
Attorney, Division of Consumer and Business Education, FTC
August 14, 2023
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Oh, the joy of clicking “unsubscribe” when your email inbox overflows with spam messages trying to sell you stuff you DO NOT WANT! But what if there’s no “unsubscribe” link and the emails won’t stop?
The FTC says that’s what happened to people who set up “Free Membership” accounts with Experian to manage access to their Experian credit report information online. The accounts let people “freeze” their credit to make it difficult for identity thieves to open new accounts in their name and “unfreeze” their credit to apply for a mortgage or other new credit.
But, the FTC says, the free accounts came with an extra that many people didn’t want — emails from Experian pitching its credit card offers, credit score services, auto-related products and services, and upsells for its paid membership programs. According to the FTC, Experian sent the emails even to people who opted out of getting its marketing emails, falsely claiming the email “contains important information about your account.” What was missing from the messages? The FTC says the emails didn’t include a way for people to opt out of getting them, in violation of the CAN-SPAM Act.
Experian Consumer Services agreed to pay a $650,000 civil penalty and comply with the CAN-SPAM Act to settle an FTC lawsuit. The CAN-SPAM Act gives you the right to stop companies from sending you email that primarily advertises commercial products or services. Among other things, it requires companies that send marketing emails to include a clear and conspicuous notice that you have the right to opt out of getting future marketing emails. They also must give you an “unsubscribe” link or other internet-based way to opt out.
If you get unwanted marketing emails, opt out of getting them. The company must honor your request within 10 business days. If there’s no way to opt out or if you still get unwanted email from the company after 10 business days, tell the FTC at ReportFraud.ftc.gov.
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Business Blog
When sending commercial email, businesses can’t unsubscribe from CAN-SPAM compliance
By
Lesley Fair
August 14, 2023
Just because consumers sign up for a membership or subscription doesn’t mean they sign up to get unwanted marketing email. A proposed $650,000 settlement with Experian Consumer Services just filed on the FTC’s behalf by the Department of Justice reminds businesses that they can’t “unsubscribe” from their legal obligations under the CAN-SPAM Act.
Under the Fair Credit Reporting Act, consumers have a right to place a free security freeze on their credit report or lift it once it’s in place. Experian Consumer Services, which shares a parent company with the credit bureau Experian, requires consumers who want to manage their Experian credit report information online – for example, to freeze or unfreeze their report – to create an online membership account using an email address.
According to the FTC, once consumers signed up for a free membership account with Experian, the defendant sent them multiple emails that used phrases like this to describe why it was contacting them: “This email was sent because it contains important information about your account” and “This is not a marketing email – you’re receiving this message to notify you of a recent change to your account.”
That’s what the company claimed, but a closer look at the emails included in the complaint reveals that the messages weren’t providing consumers with “important information” about their accounts. Rather, the FTC says the defendant sent those emails to promote credit card offers, products to improve consumers’ credit scores, discounts on auto-related services, and upsells for various Experian products – content the complaint alleges was decidedly commercial in nature. Put in the plainest terms, they were sales pitches.
The purpose of those messages is of critical importance under the CAN-SPAM Act. In the statute, Congress defined “commercial electronic mail message” as email “the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.” And if the message meets that definition – which the FTC alleges the defendant’s emails most certainly did – the law requires companies to take certain steps to protect consumers from receiving unwanted marketing messages in the future. And that, says the FTC, is where the defendant opted out of its legal obligations.
Take a closer look at the promotions included in the complaint to see what we mean. The emails featured bright colors, eye-catching graphics, and promises of “insurance savings” and a “fabulous, newly boosted FICO score.” But according to the complaint, there were two glaring omissions in those Experian messages: “[T]he emails do not provide notice of consumers’ ability to opt out of receiving further promotional messages or a mechanism for doing so.” In other words, the defendant didn’t include the opt-out information and the “unsubscribe” link, both required by the CAN-SPAM Act.
What’s more, the defendant allegedly set up a roadblock to stop consumers who didn’t want to receive further marketing messages. The emails told consumers. “You can update some alerts and communications preferences any time on your . . . profile, but you’ll continue to receive notifications like this one on the status of your account.” In effect, the defendant conveyed to consumers that even if they wanted to opt out, tough luck. They would continue to receive sales pitches masquerading as messages about “the status of your account.”
The proposed settlement includes a $650,000 civil penalty for CAN-SPAM Act violations and injunctive provisions to change the defendant’s practices in the future.
Now is a good time to take a closer look at your company’s email practices. Do they line up with the FTC’s updated publication, CAN-SPAM Act: A Compliance Guide for Business? In addition, consider these takeaways.
The CAN-SPAM Act applies even if your business operates on a subscription or membership model. Are you under the impression that your CAN-SPAM obligations go out the window once people sign up as “subscribers” or “members”? Wrong. Your customers retain their legal protections under the law regardless of their status as subscribers or members. That means your marketing emails: 1) must clearly tell consumers they can opt out of getting those messages from you in the future; and 2) must include an unsubscribe link that works.
Don’t be too quick to categorize your emails as “transactional or relationship” messages. The CAN-SPAM Act’s definition of “commercial electronic mail message” doesn’t include a “transactional or relationship message,” but don’t click that send button just yet. As the statute and Section 316.3 of the FTC’s CAN-SPAM Rule make clear, the definition of that term is specific and narrow. And simply having a relationship with a consumer as a subscriber or member doesn’t transform a marketing message – an email with the primary purpose of an promoting a commercial good or service – into a “relationship” message.
Read the revised CAN-SPAM Act: A Compliance Guide for Business for updated guidance.
Tags:
- Consumer Protection
- Bureau of Consumer Protection
- Advertising and Marketing
- Online Advertising and Marketing
- Advertising and Marketing Basics
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