FTC issues final rules on CAN-SPAM

HR Magazine, March, 2005 by Bill Leonard

The Federal Trade Commission (FTC) issued final rules governing how businesses and individuals must comply with the Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM) when transmitting e-mail messages for commercial purposes.

The CAN-SPAM Act took effect Jan. 1, 2004, and the FTC has been using interim rules to enforce the law. President Bush signed CAN-SPAM into law Dec. 16, 2003, and the quick effective date of only nine days forced the FTC to spend most of 2004 playing catch-up to create a set of regulations for enforcing the act. The final regulations are set to take effect March 28.

A common misperception about the law among individuals and businesses is that CAN-SPAM outlaws unsolicited commercial e-mails--also known as spam. The law merely regulates how spam and e-mail for commercial purposes may be transmitted over the Internet.

"While we applaud the intent of the CAN-SPAM Act, clearly it has had no meaningful impact on the unrelenting flow of spam that continues to clog the Internet and plague our e-mail inboxes," said Scott Chasin, chief technology officer for MX Logic, a Denver-based technology firm that tracks and analyzes e-mail usage for employers. "In fact, the overall volume of spam increased in 2004, and we fully anticipate continued growth in 2005."

The new rules as finalized by the FTC state that any e-mail attempting to market or sell any goods or services is a commercial message and therefore subject to certain restrictions under the law. According to the final rules, a commercial e-mail message violates the law if it does not display the sender's valid postal address, does not have a clearly visible statement identifying it as an advertisement and does not include a way for recipients to request not to receive further messages.

According to the law, only the FTC and Internet service providers can file claims against individuals and businesses that are suspected of violating CAN-SPAM. FTC officials, however, do encourage consumers and individual businesses to report suspected violators. To combat the amount of spam traffic on the Internet, the FTC has created a web site that includes information, links and resources designed to help businesses and individuals reduce the amount of spam they receive.

In addition, the FTC urges individuals to forward e-mails that they believe are deceptive and do not comply with the CAN-SPAM regulations to spam@uce.gov. The FTC will compile a database as evidence to prosecute people and businesses that send e-mails in violation of the law.

Any e-mails that are noncommercial or transactional in nature will be exempt from the law and cannot be considered as spam, according to the final rules. An e-mail will be considered transactional if it meets at least one of the five following qualifications:

* It completes or confirms a commercial transaction between the recipient and the sender.

* It includes information about warranties, recalls or product safety.

* It provides information regarding a membership, subscription, credit account or other ongoing commercial relationship.

* It includes information about an employment relationship or benefit plan.

* It delivers goods or services that the recipient purchased from the sender.

Even though the final rules exempt most messages concerning HR-related transactions, employers and HR professionals would be wise to familiarize themselves with the new regulations, according to Wendy Wunsh, manager of employment regulations for the Society for Human Resource Management. Because most organizations do conduct business through web sites and electronic messaging, the new rules could change the way companies train their employees to send and process business-related e-mails.

According to Chasin with MX Logic, businesses have a long way to go before they comply with the law. His company sampled e-mails throughout 2004 and concluded that less than 3 percent of messages sent actually complied fully with CAN-SPAM. Chasin said he thinks the compliance rate will improve slightly this year.

BILL LEONARD IS SENIOR WRITER FOR HR NEWS.