Yesmail settles with FTC

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Yesmail Inc. has agreed to pay a $50,717 civil penalty to settle Federal Trade Commission charges that it violated federal law by sending unsolicited commercial e-mails after consumers asked it to stop doing so.

The FTC charged Yesmail, doing business as @Once Corp., with sending e-mail messages on behalf of its clients more than 10 business days after recipients had asked it to stop.

The company, which is the e-mail subsidiary of Omaha-based database firm InfoUSA, offers e-mail marketing services, including sending commercial e-mail and processing unsubscribe requests from recipients.

"It was really a technical issue," said Michael Hilts, president and general manager of Yesmail. "It wasn't a major issue and we don't believe it was a violation, but it was too costly to fight it."

Mr. Hilts said the issue related to an incident that took place back in 2004 with @once Inc., the Portland, OR-based e-mail marketing company that was integrated in 2005 with infoUSA's existing e-mail subsidiary Yesmail.

He said these types of very minor technical issues are allowed under the Act, "but it would have cost more than the $50,000 to fight it. It is unfortunate, but I understand they were just doing their job."

"This really illustrates the importance of strictly complying with the CAN-SPAM Act and other highly technical direct marketing statutes, such as the Telemarketing Sales Rule," said Joseph J. Lewczak, a partner at Davis & Gilbert LLP in New York.

"More than that, however, it shows how critically important it is to have processes and procedures in place for compliance that you know work," he said.

The FTC's complaint and order, which were filed in the U.S. District Court for the Northern District of California, alleges that Yesmail's spam filtering software filtered out certain "reply to" unsubscribe requests from recipients as "spam." This resulted in Yesmail failing to honor unsubscribe requests by sending thousands of commercial e-mail messages to recipients more than 10 business days after their requests.

The CAN-SPAM Act requires commercial e-mailers to give recipients an opt-out method and honor such requests within 10 business days.

The Act also bans false or misleading header information, prohibits deceptive subject lines, requires that commercial e-mail be identified as an advertisement, and requires the sender to include a valid physical postal address.

Mr. Lewczak said he always advises his clients that they should do the following to ensure compliance with the Act: Put a written policy in place; train your personnel and vendors; keep records; test your system and your written policy -- make sure it works; and appoint a "chief spam officer."

"Taking the foregoing steps won't ensure that you will never violate the act; however, it will make it extremely less likely to happen," he said. "In addition, the FTC will look favorably upon companies that take compliance seriously and that implement processes and procedures to prevent a violation."

Under the proposed settlement, Yesmail is permanently prohibited from violating the CAN-SPAM Act, including failing to include in its e-mail a functioning return e-mail address or other Internet-based mechanism that a recipient may use to decline future e-mail, failing to disclose an opportunity to decline to receive e-mail, or sending e-mail more than 10 business days after a recipient has asked them to stop.

"With the potential of civil penalties of $11,000 per violation, it seems that Yesmail got off pretty easy, since it is alleged to have sent out 'thousands' of e-mails in violation of the act," Mr. Lewczak said.

"But e-mail marketers should still take this as a warning," he said. "The FTC has been stating for the past couple of years that enforcement of the CAN-SPAM Act will be a top priority, and obviously it is."

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