By Jill M. Goldman, Esq.
What is CAN-SPAM and why is it important to bank marketers?
By now, you may have heard of the phrase “CAN-SPAM,” which should not be confused with the canned meat-like product favored in Hawaii. CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) represents the laws that regulate non-solicited commercial communication. So you may ask, what does that mean? Simple. The CAN-SPAM Act of 2003 is a law that sets rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them, and spells out tough penalties for violations.
But you are probably asking, how does the CAN-SPAM Act apply to me as the bank marketer? Despite its name, the CAN-SPAM Act doesn’t apply just to bulk email. It covers all commercial messages, which the law defines as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service,” including email that promotes content on commercial websites. So that means all your commercial marketing emails for products. The law makes no exception for business-to-business email. All email—for example, a message to former customers announcing a new product line—must comply with the law.
However, if the content does not fall within the scope of commercial, then that email does not need to comply. What matters is the “primary purpose” of the message. To determine the primary purpose, remember that an email can contain three different types of information: commercial content; transactional or relationship content; and other content.
- Commercial content advertises or promotes a commercial product or service, including content on a website operated for a commercial purpose
- Transactional or relationship content is different from commercial content in that it facilitates an already agreed-upon transaction or updates a customer about an ongoing transaction.
- Other Content is that which is not defined in the other two categories.
If the message contains only commercial content, its primary purpose is commercial and it must comply with the requirements of CAM-SPAM. If it contains only transactional or relationship content, its primary purpose is to communicate necessary information about an existing transaction or relationship. In that case, it may not contain false or misleading routing information, but is otherwise exempt from most provisions of the CAN-SPAM Act.
The email message qualifies as transactional or relationship if it consists only of content that:
- facilitates or confirms a commercial transaction that the recipient already has agreed to;
- gives warranty, recall, safety, or security information about a product or service;
- gives information about a change in terms or features or account balance information regarding; a membership, subscription, account, loan or other ongoing commercial relationship;
- provides information about an employment relationship or employee benefits or;
- delivers goods or services as part of a transaction that the recipient already has agreed to.
It’s common for email sent by businesses to mix commercial content and transactional or relationship content. When an email contains both kinds of content, the primary purpose of the message is the deciding factor.
Here’s how to make that determination: If a recipient reasonably interpreting the subject line would likely conclude that the message contains an advertisement or promotion for a commercial product or service, or if the message’s transactional or relationship content does not appear mainly at the beginning of the message, the primary purpose of the message is commercial.
So, when a message contains both kinds of content—commercial and transactional or relationship—if the subject line would lead the recipient to think it’s a commercial message, it’s a commercial message for CAN-SPAM purposes. Similarly, if the bulk of the transactional or relationship part of the message doesn’t appear at the beginning, it’s a commercial message under the CAN-SPAM Act. Please be aware that if you hire a third party to conduct email marketing on your behalf, the law makes clear that you can’t contract away your legal responsibility to comply with the law. Both the company whose product is promoted in the message and the company that actually sends the message may be held legally responsible.
You may ask, what’s the penalty for a CAN-SPAM violation? Well, it adds up quickly and can hurt your marketing budget bottom line: Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $16,000. So non-compliance can be costly. There are also criminal penalties for aggravated violations.
If you’re sending commercial email…
Now that you understand the importance of CAN-SPAM, you’ll want to follow some easy tips for complying with the CAN-SPAM Act. Here are some practical examples of what you should do when you send a commercial email message:
- Address the header in an email. You should not use false or misleading header information. Your “From,” “To,” “Reply-To,” and routing information, including the originating domain name and email address, must be accurate and identify the person or business who initiated the message.
- Ensure that the subject line is not deceptive. The subject line must accurately reflect the content of the message.
- Identify the message as an advertisement. The law gives you a lot of leeway in how to do this, but you must disclose clearly and conspicuously that your message is an advertisement.
- Disclose your location to recipients. Your message must include your valid physical postal address. This can be your current street address, a post office box you’ve registered with the U.S. Postal Service, or a private mailbox you’ve registered with a commercial mail receiving agency established under Postal Service regulations.
- Provide instructions for opting out of future emails. Your message must include a clear and conspicuous explanation of how the recipient can opt out of getting email from you in the future. Craft the notice in a way that’s easy for an ordinary person to recognize, read, and understand. Creative use of type size, color, and location can improve clarity. Give a return email address or another easy Internet-based way to allow people to communicate their choice to you. You may create a menu to allow a recipient to opt out of certain types of messages, but you must include the option to stop all commercial messages from you. Make sure your spam filter doesn’t block these opt-out requests. Any opt-out mechanism you offer must be able to process opt-out requests for at least 30 days after you send your message. You must honor a recipient’s opt-out request within 10 business days. You can’t charge a fee, require the recipient to give you any personally identifying information beyond an email address, or make the recipient take any step other than sending a reply email or visiting a single page on an Internet website as a condition for honoring an opt-out request. Once people have told you they don’t want to receive more messages from you, you can’t sell or transfer their email addresses, even in the form of a mailing list. The only exception is that you may transfer the addresses to a company you’ve hired to help you comply with the CAN-SPAM Act.
Jill Goldman is vice president, senior counsel II with the American Bankers Association.
This article is for informational and educational purposes only. It is not offered as and does not constitute legal advice or legal opinions. The information contained in the article should not be used as a substitute for seeking professional legal advice. If legal or other expert assistance is required, the services of a competent professional should be sought.
