Just because a consumer signs up for a membership or subscription doesn't mean they're signing up to receive unwanted marketing emails. The $650,000 settlement with Experian Consumer Services just filed by the Department of Justice on behalf of the FTC reminds companies that they cannot “remove” their legal obligations under the CAN-SPAM Act.
Under the Fair Credit Reporting Act, consumers have the right to place a free security freeze on their credit report, or to remove it once it has been applied. Although Experian Consumer Services shares a parent company with the credit reporting company Experian, consumers who wish to manage their Experian credit report information online (such as freezing or unfreezing their report) can use their email address You must create an online membership account using .
According to the FTC, after a consumer signed up for a free membership account with Experian, the defendants sent the consumer multiple emails explaining the reason for the contact using phrases such as: “This email has been sent because it contains important information about your account.” “This is not a marketing email. You are receiving this message to notify you of recent changes to your account.” is.”
That's what the company claimed, but a closer look at the emails included in the complaint shows that the messages did not provide consumers with “material information” about their accounts. Rather, the FTC alleges that defendants sent these emails to promote credit card offers, products that improve consumers' credit scores, discounts on auto-related services, and upsells on various Experian products. However, the complaint alleges that the content is clearly commercial. In the simplest terms, they were sales pitches.
The purpose of these messages is very important under the CAN-SPAM Act. In this law, Congress defined a “commercial e-mail message” as an e-mail that “has the principal purpose of commercial advertising or promotion of a commercial product or service.” And if the message falls under that definition (which the FTC alleges the defendants' emails almost certainly do), certain steps may be taken to prevent consumers from receiving unwanted marketing messages in the future. Companies are required by law to take such measures. And that's where the defendants opted out of their legal obligations, the FTC says.
Take a closer look at the promotions included in the claim to see what we mean. The email featured bright colors, eye-catching graphics, and promised “insurance savings” and “a great new FICO score.” But there were two glaring omissions in Experian's message, according to the complaint.[T]The email will not inform you whether or the mechanism by which the consumer may opt-out of receiving future promotional messages. ” In other words, Defendants did not include the opt-out information and “unsubscribe” link required by the CAN-SPAM Act.
Additionally, the defendants allegedly erected roadblocks to deter consumers who did not want to receive further marketing messages. The email told consumers: “You can update some alert and communication preferences at any time…but you will still receive such notifications regarding the status of your account.” I also told them that it was difficult. They will continue to receive sales pitches disguised as messages about “account status.”
The proposed settlement includes a $650,000 civil penalty for violations of the CAN-SPAM Act and an injunction prohibiting future changes to the defendants' practices.
Now is a good time to take a closer look at your company's email practices. Are these consistent with the FTC's latest publication, CAN-SPAM Act: A Compliance Guide for Business? Additionally, consider the following:
The CAN-SPAM Act applies even if your business operates on a subscription or membership model. Are you assuming that once people sign up as a “subscriber” or “member” the CAN-SPAM obligations are ignored? Wrong. Customers retain legal protection under the law regardless of their status as subscribers or members. So your marketing emails are: 1) You must clearly communicate to consumers that they can opt out of receiving future messages from you. 2) You must include a working unsubscribe link.
Don't be too quick to classify emails as “transactional or relationship messages.” Although the CAN-SPAM Act's definition of “commercial email message” does not include “transactional or relationship messages,” 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 this term is specific and narrow. Additionally, simply having a relationship with a consumer as a subscriber or member does not transform a marketing message (email whose primary purpose is to promote a product or service) into a “relationship” message.
For the latest guidance, read the revised CAN-SPAM Act: Compliance Guide for Businesses.
