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CAN-SPAM Lawsuits: 10 Ways to Avoid Email Marketing Violations

What is CAN-SPAM?

Email is among the most popular and cost effective means of marketing. But while it’s often a great way to nurture leads, companies have to be extra careful when distributing these messages. Of course, this caution wasn’t always there until the enactment of CAN-SPAM.   

Acronym for Controlling the Assault of Non-Solicited Pornography and Marketing ACT of 2003, CAN-SPAM sets the standards for electronic commercial mail and messaging. The Act was signed by President George W. Bush as a response to the increasingly high number of spam mail received by consumers.

These requirements are enforced by the FTC (Federal Trade Commission) and includes penalties so stiff they could bankrupt small businesses. Even a small list of 50 recipients could result in total fines of up to $800,000 if your marketing emails were not fully compliant with the Act.

Below you will find a list of 10 CAN-SPAM Lawsuits to learn from and the 10 Best Practices for being CAN-SPAM Compliant.

Costly Email Marketing Violations

graphic communicating the cost of SPAM lawsuits

This small selection of CAN-SPAM law suits shows that no one is immune to prosecution should the spotlight fall on them. If big brands with their large marketing departments can fall afoul of the law, what hope is there for sales teams who have none of the CAN-SPAM ready tools their marketing counterparts have?

Also, don’t be lulled into thinking only the FTC can prosecute, and that they only go after big brands and intentional offenders. This is not the case at all. Actually any business, group or individual can take legal action against spammers and they do. For example this lawyer and anti-SPAM activist, one of hundreds who specialize in SPAM litigation, claims more than 50 cases awarded judgment against spammers, ranging from a few dollars to hundreds of thousands in settlements.

Microsoft ($7M Judgement), AOL, Earthlink ($16M judgement) and many others including Facebook ($873M judgement) and MySpace ($235M judgement), have also filed separate law suits of their own against dozens of different spammers, with some success. In these cases, the SPAM campaign targeted their customers (e.g. Hotmail users or Facebook users) and/or was launched using compromised email or social media accounts.

10 CAN-SPAM Law Suits to Learn From

CAN-SPAM Violation: Colby Fox et al. fined $500,000

According to the FTC’s June 2016 complaint, the defendants paid affiliate marketers to send consumers millions of illegal spam emails from hacked email accounts, making it appear that the messages came from the consumers’ family members, friends, or other contacts. Links in those email messages led to websites deceptively promoting the defendants’ unproven weight-loss products.  You can read more here.

Email Marketing Takeaway: Masquerading as someone else is illegal

CAN-SPAM Violation: Yair Shalev & Kobeni Inc. fined $350,000

The FTC charged that they sent deceptive emails in advance of the Affordable Care Act (ACA) roll-out, falsely claiming that consumers would be violating the law if they did not immediately click a link to enroll in health insurance. They also alleged that the emails failed to provide a mechanism to opt-out or a valid physical postal address.  You can read more here.

Email Marketing Takeaway: Sending emails with deliberately misleading information is illegal.

CAN-SPAM Violation: ValueClick. fined $2.9 million

The FTC charged ValueClick subsidiary Hi-Speed Media with using deceptive emails claiming that consumers were eligible for ‘free’ gifts, including laptops, iPods, and high-value gift cards…”. Consumers lured to ValueClick’s Web sites by these promises were led through a maze of expensive and burdensome third-party offers which they were required to “participate in” in order to receive the promised “free” merchandise.  You can read more here.

Email Marketing Takeaway: Onerous conditions to realize a “free” offer are illegal.

CAN-SPAM Violation: Kodak Imaging Network fined $32,000

The FTC claimed they failed to offer an opt-out method or honor consumers’ right to opt out within 10 days of making the request. One marketer also failed to include a valid postal address. Kodak argued it was a mistake where someone sent a campaign prematurely before it was ready.  You can read more here.

Email Marketing Takeaway: Ignorance or negligence is no excuse for non-compliance.

CAN-SPAM Violation: YesMail Inc. fined $50,717

The FTC alleged that Yesmail’s spam filtering software blocked some unsubscribe requests in the form of an “unsubscribe me” reply. This meant Yesmail failed to honor some unsubscribe requests and continued mailing opted out recipients more than 10 days after their requests.  You can read more here.

Email Marketing Takeaway: Using reply-to is not a foolproof. An opt-out link is best.

CAN-SPAM Violation: Jumpstart Technologies fined $900,000

“These defendants intentionally used personal messages as a cover-up for commercial messages,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “Deceptive subject lines and headers not only violate the CAN-SPAM Act, but also consumer trust.”  You can read more here.

Email Marketing Takeaway: Misleading subject lines and sender information is illegal.

CAN-SPAM Violation: Optin Global Inc. fined $475,000

After receiving 1.8 million of the defendants messages from consumers, the FTC charged that the defendants e-mail contained false or forged header information. This included deceptive subject headings, failure to identify e-mail as advertisements or solicitations and failure to notify consumers they had a right to opt out of receiving more e-mail. They also failed to provide an opt-out mechanism and to include a valid physical postal address. In short they violated almost every provision of the CAN-SPAM Act.  You can read more here.

Email Marketing Takeaway: You are responsible for affiliates sending email in your name.

CAN-SPAM ACT Violation: Trancos, Inc. fined $87,000

Trancos sent email campaigns identifying the sender as various nonexistent organizations, including Paid Survey, Your Business, Christian Dating, Your Promotion, Bank Wire Transfer Available, Dating Generic, and Join Elite. The court awarded the individual plaintiff $7,000 in damages and more than $80,000 in attorney fees.  You can read more here.

Email Marketing Takeaway: Falsifying sender or header information is illegal.

CAN-SPAM Violation: Inet Ventures Pty. Ltd. fined $15.15 million

The FTC said that individual officers of a company can be liable if they participate directly in the spamming or if they knew or should have known about the deceptive practices. The FTC charged that the defendants’ spam messages deceptively marketed a male-enhancement pill, prescription drugs, and a weight-loss pill in violation of federal law.  You can read more here.

Email Marketing Takeaway: Officers of a company may be liable for spam violations.

CAN-SPAM Violation: ATM Global Systems, Inc. fined $442,900

FTC Charged that emails contained false originating email addresses, and failed to provide clear and conspicuous notice of the opportunity to decline to receive further spam from the sender, and/or a functioning return e-mail address, and the senders’ valid physical postal address. You can read it here.

Email Marketing Takeaway: Pretending to be sender that doesn’t exist is illegal

ALSO, Don’t Forget about SMS SPAM Laws

SPAM laws are not limited to email. In recent years there has been a growing incidence of SMS Spam. Here are a few examples SMS SPAM cases. Once again lots of household names caught in the act!

How to Avoid CAN-SPAM Violations and Lawsuits

We’ve already seen solid examples of companies that incurred heavy fines as a result of CAN-SPAM lawsuits. Needless to say, non-compliance can be very costly. If you don’t want to end up in similar legal scuffles, here are 10 smart ways to avoid email marketing violations.       

Top 10 CAN-SPAM Best Practices

photo of SPAM stocked on shelves

1: Do Not Use Deceptive Subject Lines

Here’s a requirement that a lot of email marketers tend to accidentally overlook. Is your subject line accurate? Sure, we all want a great hook that will make your promotions stand out. However, you need to be careful not to make too many claims that really don’t match with the email content.

One example that puts lots of companies in hot soup is the subject line “You have won”. If there’s no reward to be collected, then the only purpose of this line is click bait. This is considered very misleading and will result in fines for non-compliance.       

Conversely, it is acceptable to have a subject line like “Get 15% off now” as long as you have a code or link to accompany the discount. Basically, you won’t have to stay away from sensationalism as long as you are fully honest with the recipient.

2: Do Not Harvest Email Addresses

Let me stop you right there; collecting email addresses and sending unsolicited emails should be avoided at all costs. For instance, your sales reps might be visiting trade shows only to collect a bunch of business cards with the intention of sending bulk email.

This is what we refer to as unsolicited emails that have zero consent and will lead to losing business or worse. What you need to do is send out one email that allows potential recipients to subscribe to your email marketing campaign. This way, you’re more likely to gain actionable leads and loyal customers while still remaining in compliance with the CAN-SPAM act of 2003.

3: Do Not Use False Header Information

Is your transmission data accurate? Transmission data includes the “To”, “From”, and “Reply To” fields as well as the routing information. All this data needs to be highly accurate and able to identify the business or person sending the commercial messages.

For instance, Gmail lets you find transmission data by hitting the arrow next to your email address. But if your postal address indicates a location in London and the data shows a domain name and location in California, then you’ll be in violation of the CAN-SPAM act. Always double-check the information in these fields, especially if you retain foreign companies that might be unaware of these requirements. Checkout our article on how to identify fake email addresses.

4: Always Include a Postal Address

If you’re dealing with commercial emails, the Act requires you to include a postal address. Not only does this confirm the legitimacy of the message, it also offers recipients a way to reach out if they want to opt out.

Placing the address at the bottom seems to be the general standard for companies using email as a marketing strategy. Make sure you put it at the bottom with clear options for unsubscribing should the recipient wish to.

5: Offer an Opt-In Option

While not many marketers appreciate this, it’s always advisable to use an opt-in process for emails. These options are very conspicuous and leave no doubt to what recipients are signing up for.

It can be as simple as leaving a field for recipients to add their email address. Other times, companies actually use double opt-in strategies where users confirm their email address and the fact that they want to receive these emails.

6: Offer a Clear Way to Unsubscribe

illustration of spam email marketing


A major part of complying with CAN-SPAM is offering the ability for recipients to opt-out of getting your emails. As we mentioned earlier, this option is usually placed at the bottom of all your messages alongside the postal address.

You could include a link that takes recipients to a page where they can unsubscribe and give you reasons that will allow you to make your campaigns more successful. But don’t bombard the recipients with endless questionnaires. Just make the unsubscribing process straightforward and conspicuous.

7: Promptly Honor Opt-Out Requests

Aim to be like most email marketing platforms which honor unsubscribe requests instantaneously. Even if you use marketing platforms, audit them to ensure this is the case.

Sure, there might be difficulties when you get opt-out requests over postal mail or telephone. However, you still have to address all requests to unsubscribe within 10 days. Failure to comply to this deadline means you risk accruing fines under the CAN-SPAM Act. Check out these best practices for email unsubscribes.

8: Never Share Email Addresses of Unsubscribed Recipients

Do you share email lists for recipients that have opted out of your service? If so, you need to stop with immediate effect. Once a recipient opts out, you have to remove them from your email lists, especially ones that you share with partners and advertisers.

Failure to do so will be considered a grievous violation of CAN-SPAM. It’s up to your company to find a way to control distribution. That’s because CAN-SPAM will still consider you liable even if your advertiser continues to use these email addresses.

9: Identify any Explicit Material

Do your emails contain explicit material? If so, part of the CAN-SPAM act addresses this issue. All companies need to identify sexually explicit content in their subject lines and only offer instructions on how recipients can access it.

The best part about CAN-SPAM compliance is that the standards are also good business sense. No one wants to be in the office opening emails that look like they’re taking time off work to check out porn.

10: Allow Users to Choose Types of Emails

Does your marketing department allow users to choose the type of email they receive from you? A lot of recipients seek a universal unsubscribe that means they no longer ever wish to receive promotional emails from you.

However, there might be a chance that recipients want some of the material while avoiding items that do not interest them. This is why you need to offer multiple products. Try to include options for opting out with the unsubscribe link to see what products work for different recipients.

Final Word – Spam Act of 2003

Other ways to avoid ending up in trouble include staying away from over-eager follow ups. Likewise, manually sending too many electronic mail message at a go is likely to trigger spam filters. But remember, the CAN-SPAM Act doesn’t exist to make your life any harder. These requirements only serve to protect subscribers and avoid email malpractices that would hurt sales people and marketers everywhere. In conjunction with the tips above, you’ll also need a few tools along the way.

Tools that will not only help avoid all email marketing violations, but also craft better emails with higher open rates. Take your email campaign to the next level with the best email template builder –Veloxy. Not only does Veloxy save you time with ready-made templates, it also adds an array of benefits. These include mail-merge, email tracking, engagement analytics, and most importantly, CAN-SPAM compliant bulk email. All these benefits means you’ll always be one step ahead of any CAN-SPAM Violations.

Additional Reading:  Email Blacklist – What it is and how to avoid it

Final Thoughts: SPAM Laws and History

This reference list the applicable SPAM laws in different countries around the world. Unfortunately, it pre-dates GDPR, but it’s still useful.  If you’re still reading, here’s an amusing account of the history of SPAM.

Have a question about sales engagementsales enablement, or email marketing? Email your friends at Veloxy  We’re home to the best email template builder with email compliance features that deliver peace-of-mind.

Read more:  Salesforce Blog

Checkout our 5 Stars Veloxy reviews in Salesforce AppExchangeCapterraG2 and Sourceforge.

Sauvik Sarkar

Sauvik Sarkar

Sales AI is transforming selling activities for companies of all sizes, and one of the leaders in this movement is Sauvik Sarkar. While artificial intelligence can be intimidating to most, Sauvik helps improve adoption with one-on-one training, insightful blog articles, and more.

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