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Lesson #27


We discussed Spam in Lesson One of this online course, setting out the Rules of Thumb to help you avoid being accused of Spamming. In that lesson, we noted that there were many sources for definitions and rules regarding Spam. We noted that there were many different laws in many different jurisdictions and many different rules in the various "Acceptable Use Policies" of Internet Service Providers. While that observation still holds true, the Can-Spam Act of 2003, which became law January 1, 2004, does simplify things somewhat for Internet users in the United States (and for those who send commercial e-mail into the United States). The Can-Spam Act of 2003 is a Federal Law that supercedes differing State laws in the United States. In this Lesson, we will give an overview of the highlights of this new law.

It is encouraging for Affiliate Marketers to note something stated at the very beginning of the Can-Spam Act of 2003. The first section of the Act lists the findings of the legislature that have led to passage of the Act. The first of these findings is:
Electronic mail has become an extremely important and popular means of communication, relied on by millions of Americans on a daily basis for personal and commercial purposes. Its low cost and global reach make it extremely convenient and efficient and offers unique opportunities for the development and growth of frictionless commerce.
For those still skeptical about the opportunity for online profit, take note. You can’t get more official verification than a factual finding of the United States Congress. The U.S. Congress has officially determined that the Internet offers "...unique opportunities for the development and growth of frictionless commerce."
The SFI Marketing Group is on the forefront of the development and growth of these unique online opportunities. With a little effort to learn the skills and play by the rules, you can, through your involvement with SFI, take part in this amazing growth of "frictionless commerce."
All participants in this exciting new world of Internet opportunity need to work to reduce and avoid the devastating effects of Spam, however. So, let’s turn our attention now to understanding the new law.

First, there are two things you need to keep in mind when reading articles on legal topics. You need to know that the law that applies to any particular situation is determined from an examination of many different sources of laws...and additional laws pertaining to how those sources interact with each other and with particular fact patterns. Therefore, you should consult an competent attorney in your jurisdiction to learn the possible legal consequences of your particular situation, before undertaking anything important or risky, rather than relying on your reading of any particular article.
I have often seen people get in red-faced arguments over what the law is in a particular situation. Both insist that they have read the law and understand the law, and yet they arrive at different conclusions. Laws come from many different sources. For example, some states in the United States have already passed laws dealing with Spam. Now the Federal Congress has also passed a law. Within each state, there may be state agencies that are charged with promulgating administrative rules to flesh out the law passed by the state legislature. The federal law also delegates rule-making authority to the Federal Trade Commission and preserves the authority of other agencies in certain overlapping areas. You also have the courts, both state and federal, which interpret again what these various laws and agency promulgations mean and to make sure the laws are constitutional. Governments are not perfect, and there are often inconsistencies in these various promulgations and interpretations. Quite often, people who argue over what the law is have simply each read different laws from different sources. Usually both have failed to take into account which of those sources have control over the others in which situations.
The second thing to keep in mind is that laws also vary in their application depending on the particular factual situations involved. No two situations are exactly alike. There are many factors that must be assessed before an interpretation of the law can be applied to any particular situation. It is certainly a good thing for you to read articles and keep yourself abreast of new legal topics, but you must keep in mind that reading articles is not a substitute for competent legal advice from an attorney who is familiar with the law as applied in your particular jurisdiction and is well apprised of your particular factual situation. Thus, nothing in this article or anywhere in this course is intended to be, or to be a substitute for, legal advice.

Legislatures like to have good reasons to pass new laws. They often express these reasons in the "Findings" that appear at the beginning of the law. The reasons given for passing the Can-Spam Act may be summarized as follows:
E-mail is an extremely important and cost efficient form of communication used by millions of Americans. The convenience and efficiency of e-mail is being threatened by the rapidly growing volume of Spam, which is currently estimated to account for over half of all e-mail traffic. The necessity to store, access, review, sort, and discard Spam is costly in both time and money. Spam also increases the likelihood that wanted e-mail will be lost, overlooked, or accidentally discarded amidst the large volume of Spam that most Internet users receive daily. Many of the Spam messages are deceptive, fraudulent, vulgar, pornographic, or otherwise offensive. Spam is costly to ISPs and educational institutions who handle large volumes of e-mail traffic. Many spammers disguise the source of the Spam and include misleading subject lines to induce the recipients to view the mail. Many spammers do not provide or honor opt-out requests. Many spammers farm e-mail addresses from Websites and online services. The laws enacted by the various States are inconsistent, confusing, and have not been effective. The problems associated with the rapid growth and abuse of unsolicited commercial electronic mail cannot be solved by Federal legislation alone. The development and adoption of technological approaches and the pursuit of cooperative efforts with other countries will be necessary as well.

Having made these findings, the Act then proceeds to prohibit the things found to be most harmful. The following list paraphrases what is prohibited by the Act. The Act uses different wording and has specific definitions for the words used in the Act. The following is intended only to give you a general conceptual idea of what the act intends to prohibit:

• Accessing another computer without authorization and sending bulk commercial e-mail from that computer.
• Using another computer to relay bulk commercial e-mail with the intent to hide the source of the e-mail.
• Falsifying headers in bulk commercial e-mail.
• Registering with a false identity for five or more e-mail or access accounts or two or more domain names and sending bulk commercial e-mail from any combination of those accounts.
• Falsely acquiring five or more IP addresses and sending bulk commercial e-mail with those IP address.
• Conspiring to do any of the above.

Violators can be punished with a substantial fine and up to 5 years in prison under certain circumstances. Your property, equipment, and software can also be confiscated under certain circumstances. The Act also prohibits:

• Sending any commercial e-mail (bulk or not) that does not contain an opt-out mechanism that is functioning for at least 30 days after the message is sent (barring uncontrollable technical problems).
• Sending any e-mail more than 10 days after someone has opted not to receive e-mail from you. Importantly, the act also prohibits passing an opted-out e-mail address on to anyone else who will send e-mail to the address. This includes selling or even giving away e-mail lists that contain the e-mail addresses of those who have opted-out.

This last provision is significant in that the practice among many over-aggressive marketers has been to stop sending mail to those who opt-out of their list, but then to turn around and sell that address to others. It is now a federal offense to do so!
VERY IMPORTANTLY, all Internet Marketers should note that the new law prohibits sending any commercial e-mail (bulk or not) to anyone unless the message provides:

(I) clear and conspicuous identification that the message is an advertisement or solicitation;
(II) clear and conspicuous notice of the decline to receive further commercial electronic mail messages from the sender; and
(III) a valid physical postal address of the sender.

This provision, however, does not apply when someone has given prior affirmative consent to receive the message (such as opt-in newsletters)­it is still good practice to include these things anyway.

Harvesting e-mail addresses from Websites in contradiction of the stated Privacy Policy of the Website or knowingly using such addresses is also prohibited. In other words, you can’t have a Privacy Policy stating that the operator of a Website or online service will not give, sell, or otherwise transfer addresses maintained by such Website or online service to any other party for the purposes of initiating, or enabling others to initiate, electronic mail messages...and then do so anyway. To do so now is to commit a federal crime.

"Dictionary Attacks"–i.e. randomly generating possible user names to combine with known domain names in a shotgun approach to spamming­is also made unlawful by the Can-Spam Act.

There are also provisions in the Act setting additional requirements on sexually explicit e-mail.

Further included in the Act are provisions outlawing businesses from profiting from Spam. This is an important provision in the Affiliate Marketing arena. Businesses who market their goods through affiliate programs and the affiliate program operators must now take active steps to prevent the affiliates involved from using Spam, directly or indirectly. In order to comply with the Act and avoid criminal charges against them, such businesses and affiliate program operators must also take active steps to detect any use of Spam by their affiliates and to report such violations to the FTC.

The Act also provides for studies to implement a future "Do-Not -E-mail" list and for rewards to be given to those who help identify violators of the Act.


The main purpose of the Can-Spam Act is to outlaw Spam and provide criminal and civil enforcement measures. The Can-Spam Act does not prevent Internet Service Providers from having their own policy of declining to transmit, route, relay, handle, or store certain types of electronic mail messages. Thus, even though an e-mail may be in full compliance with the Can-Spam Act, there is nothing in the Act to prevent an ISP from refusing to deliver the e-mail anyway.

Remember that the Can-Spam Act is designed to punish criminals by fining them thousands of dollars and putting them in jail. However inconvenient it may be to have your Internet account terminated, going to jail for up to five years is a lot worse! Thus, it follows that this type of law will be much less strict than contractual agreements and Acceptable Use Policies which are usually only enforced by refusing to deliver your e-mail or denying you access through that service.

For example, the SFI Marketing Group Spam Policy is more restrictive than the Can-Spam Act. This has been a necessity in order to keep SFI on the "White Hat" lists of various ISPs who handle large volumes of SFI e-mail (and who also have more strict policies than the Act). The Can-Spam Act, being less strict than these policies, does not change what is prohibited by the policies. SFI prohibits sending any e-mail containing an SFI link to any lead, with which you do not have a previously existing relationship, until you obtain their consent to do so. Even though some such e-mails (for example, a single e-mail sent to only one recipient ) may not be a violation of the Can-Spam Act, the e-mail may still violate SFI’s Spam Policy and thus still be a lawful basis to terminate your SFI account. The fact that the e-mail does not violate the Can-Spam Act is not a defense in this situation.

(SFI, of course, supports, and works diligently to protect, the rights of Affiliate Marketers to send commercial e-mail under reasonable circumstances. Reasonable e-mail should not be arbitrarily rejected by over-zealous ISPs. Marketers have rights too. That is a subject for another lesson, however. The point here is that the Can-Spam Act does not say what you CAN do­it only says what you CAN’T do.

Only send commercial e-mail to those who have specifically, with confirmation, opted-in to your newsletter or mailing list. That is, when they sign up with an e-mail address, you should send a confirmation request to that e-mail address, and they must then click on the link in the e-mail to confirm before inclusion in your list. (This is, among other things, to prevent someone from signing up someone else’s e-mail address.) When you send e-mail, you should either send it from an e-mail account to which the recipient can directly reply or you must include an opt-out link in the e-mail. You should include your physical post office address in the e-mail. You should accurately and honestly identify the subject of the e-mail in the subject header. Certainly do not attempt to trick or mislead anyone in any way.
There is much more to the Can-Spam Act than has been mentioned here. An exhaustive analysis of the Act is beyond the scope of this lesson. You can read the Act in its entirety (in Adobe PDF format) at .


Stay tuned to upcoming lessons in the Internet Income Course for detailed discussions of timely and important topics in Internet Marketing.

by George Little
Copyright (year) Panhandle On-Line, Inc.
License granted to Carson Services, Inc. for distribution to SFI affiliates. No part of this work may be republished, redistributed, or sold without written permission of the author.

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