Spam Legislation's Impact on Organizations' E-Mail Lists

Does your organization have a member in Utah? If one Utah-based member unsubscribes from your organization's e-mail list and isn't removed, the organization is liable for more than $500 in fines per occurrence.

Any members in Iowa? Under a similar state law, Iowa filed a case against a defendant that didn't immediately honor an "unsubscribe" request.

All in all, there are more than a dozen states that require "opt-out" instructions and more than half of them mandate that a request be honored. If your organization's communications include information that could be interpreted as "commercial," such as ads for products or services, you should pay attention. The increasingly complicated jumble of spam-related state regulations is one reason why, after years of resistance, marketing organizations finally joined Internet Service Providers ( ISPs) and anti-spam advocates in the movement for federal regulation.

In November 2003, Congress overwhelmingly passed federal anti-spam legislation known as CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing Act), making its enaction into law almost guaranteed. The law would allow the FTC to establish a "do not spam" registry and imposes an "opt-out" standard.

While many anti-spam activists claim the legislation does not go nearly far enough in the war against spam, the law would help organizations stay compliant with their mailing lists, as it would override many competing state laws.

Too Many Terms Spoil the Definition

The lack of a precise definition for spam has made many industry insiders tentative about legislation. Yet, there are a few facts on which everyone agrees. For starters, everyone knows that it is an expensive and prolific problem. Ferris Research maintains that for U.S. -based ISPs -- which spend a great deal of capital controlling the amount of spam that reaches their customers -- 30 percent of inbound e-mail is spam. At U.S.-based corporations, spam accounts for 15 percent to 20 percent of inbound e-mail. Ferris also states that spam will cost U.S. organizations over $10 billion in 2003.

In addition to the costs, spam wastes time and resources. According to Ferris, "Spam consumes computing resources, e-mail administrator and helpdesk personnel time, and reduces workers' productivity." And, the spam problem is growing. "Despite the increasing deployment of anti-spam services and technology, the number of spam messages, and their size, is continuing to increase rapidly," Ferris said.

The problem is compounded by the terms themselves. Experts seldom agree on such key terms as: "unsolicited," "bulk," and "commercial," which are widespread in current state regulations.

CAN-SPAM Provisions

A spam definition that may help protect, if not benefit, organizations has been outlined in the CAN-SPAM Act. For one thing, it deals specifically with commercial e-mail messages, which by any reasonable interpretation wouldn't include advocacy messages without commercial content. In addition, the act maintains that the sender is permitted to e-mail a recipient if the sender:

1. includes complete and truthful header information,
2. uses a functional return e-mail address and a subject line that accurately and honestly describes the contents of the e-mail, and
3. provides a method for the recipient to unsubscribe from the mailing. So while nonprofits would no longer be able to safely purchase e-mail marketing lists, they could solicit recipients with current or recently expired memberships.

As mentioned previously, the law would prohibit the use of misleading subject lines and false headers. It would also prevent e-mail address "harvesting" by crawling Web sites and automated guessing of e-mail addresses. CAN-SPAM would also require an unsolicited commercial e-mail message to be labeled as an advertisement, although not necessarily by means of any standardized terminology. (Many state laws require that a certain term, such as ADV for "advertisement," be placed in the subject line if an e-mail qualifies as such.)

In addition to these prohibitions mentioned above, there are four additional provisions of note in CAN-SPAM:

1. The bill gives the FTC the authority to impose fines, seize property, and imprison offenders. There is a lesser penalty for inadvertent violation, so even organizations that make sincere mistakes cannot plead "innocence by ignorance" and could be exposed to significant financial risk. So it pays to involve the nonprofit's attorney when drafting e-mail marketing policies.
2. CAN-SPAM allows ISPs to identify perpetrators and take action against them. The bill would grant ISPs full authority to filter any amount or type of e-mail.
3. One probable, although unintended, consequence will be an increase in the number of legitimate e-mail messages that are rejected without explanation and a rise in ISP "blacklisting," frustrating genuine communicators. Proactive nonprofits will have to allot time and manpower to verify that e-mail messages aren't blocked by overly vigilant ISPs.
4. Unlike some state laws, the legislation does not require specific subject line labeling, such as ADV. However, it's important to keep in mind that the bill's treatment of e-mail subject lines could bar some teaser copy that's often used in direct marketing. Since communicators are already sensitive to filter trigger words that can cause e-mail programs to reject messages, developing an awareness of prohibited teaser copy should be a straightforward process.
5. States would be able to sue spammers on behalf of their residents, but e-mail recipients would not be able to sue independently, which affords nonprofits some protection from their own well-meaning blunders. After all, a state's attorney general is most apt to sue a legitimate spammer. But, remember the potential costs and consider the public relations cost before becoming cavalier.

Effect on Nonprofits

In a perfect world, federal legislation would help organizations in two fundamental ways:

it would supercede all state laws, which would simplify compliance and free nonprofits from the administrative costs of managing multiple state e-mail lists (or clarify the probable cost of fines and court fees, depending on an nonprofit's risk tolerance); and

it would reduce the amount of spam in members' inboxes, giving legitimate nonprofit communications increased visibility.

However, while the legislation would pre-empt any state laws that expressly regulate unsolicited commercial e-mail outright, it would not affect all state spam laws. This only makes the tangle of state regulations more confusing, especially for nonprofits that do not have large budgets and cannot hire staff to ensure compliance. In states with a far more liberal definition of spam, nonprofits that only send advocacy messages still need to be wary.

Also, there is no provision in CAN-SPAM that requires permission to market via e-mail. Certainly, reputable organizations will (as they traditionally have) only place recipients on their e-mail list when given permission and, by doing so, voluntarily restrict their market presence. At the same time, spammers -- who seldom acquire permission -- will continue to send unsolicited e-mail messages legally, as long as the messages include opt-out instructions. Because nonprofits will restrict their messages and spammers will not, a legitimate message will still have to elbow its way to the forefront of members' inboxes.

Speaking of opt-out requests, the legislation allows companies to send spam for any of their products as long as the companies honor the opt-out requests for each unwanted e-mail message. Considering the existing atmosphere of distrust regarding e-mail solicitation, when recipients notice that they've sent opt-out requests to the same company repeatedly for different products, will recipients even bother to opt-out? More important to organizations, will they even bother to opt-in?

Making the Opt-Out Requirement Work for You

CAN-SPAM allows organizations to offer e-mail recipients a list of unsubscribe options. Used properly, the list can be used to benefit members and create goodwill for the nonprofit. The opt-out list can give members the right to request the same information delivered in different formats, such as by fax or standard mail, providing communications that align more directly with member preferences.

The opt-out list can also include a list of alternate products or services that may interest members, increasing visibility for nonprofit products and services. If members choose one of the alternate selections, they are one step closer to buying a product or service, and the nonprofit has a more targeted e-mail list. In addition, the e-mail message has communicated that the organization considers its members needs.

A Few Useful Tips

There are a few guidelines that organizations can follow to help them prepare and protect themselves against unanticipated litigation. These guidelines are a good idea even for messages that aren't addressed in CAN-SPAM legislation.

• Make sure your members know you're sending the message:An e-mail recipient has only to hit the "This is spam" button once to block your messages forever. Perhaps the member will unblock your e-mail messages later. Maybe the member will renew without ever seeing another e-mail from you. But there's a greater likelihood that the member will think your organization makes no effort to communicate important events and issues, believe that the membership is less valuable, and possibly go elsewhere.
• Make opt-in opportunities available:Members are busy. If nonprofits force them to choose between having an unsatisfying e-mail relationship or no relationship at all, many members will choose none at all. So provide options. Allow members to express preferences regarding which information they want. Not only will you have happier members, you'll have better focused mailing lists and be one step closer to compliance.
• Make it easy to unsubscribe:Not only will this soon become a federal mandate of some kind, doing so creates a positive image of the nonprofit. Recipients become suspicious when a commercial or nonprofit enterprise makes unsubscribing difficult. At best, they may perceive the organization as unprofessional; even worse, they may suspect that the e-mail is a scam designed by a spammer to collect e-mail addresses from requests to unsubscribe. Avoid complicated procedures, techno-jargon, and difficult e-mail "reply-to" addresses. It is far better to lose a member from an e-mail list than from the membership roster, so make unsubscribing as easy as subscribing.
• Make a point to run non-member e-mail marketing lists against DMA's e-mail preference service suppression file: (a file of e-mail recipients who have asked not to be sent commercial e-mail), especially if you purchased the list from a third party.
• Get some help:Nonprofits should ask their attorney to help establish formal multi-state e-mail solicitation procedures. At the very least, have an attorney review procedures before implementing them.

Conclusion

Since nonprofits don't distribute spam (by most definitions), any law that reduces the number of e-mail messages a nonprofit must compete with to reach members should be a good thing. However, many experts agree with Cameron Sturdevant, a columnist for eWeek, "If CAN-SPAM goes into effect, the most likely victims are not going to be herbal Viagra dealers, but nonprofit organizations raising money."

That's because there's no way for nonprofits to distinguish their well-meaning and necessary communications from spam, except by establishing and maintaining a long-term, intimate relationship with members and supporters. While that is the end goal of all organizations, helpful legislation that would reduce the amount of spam in member's inboxes and allow nonprofits to e-mail members without reprisal is a welcome advantage.