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Media Hack
Recently a publicist offered me a nice little scoop involving two of her clients, who planned to post a list of 10 U.S. advertisers that have been flouting the Can-Spam Act of 2003 by ignoring consumers' demands to unsubscribe. Instead of cutting down on spam, attempted delisting just generated more mounds of e-mail. Would I be interested?
Sure, I said. I hate spam as much as the next guy -- provided the next guy thinks spammers should be forced to visit every single person they have bombarded with junk e-mail and manually delete each ad. I also knew just how murky a world spam is, and how difficult it is to police, since nothing and no one is what it seems to be. After all, on the internet, just about everyone wears a mask, especially shameless hawkers trying to cram your inbox with come-ons for penile enhancements and lower mortgage rates.
First, the law: In addition to banning false or misleading advertisements (like putting fake messages in subject boxes to get around spam filters), the Controlling the Assault of Non-Solicited Pornography and Marketing Act gives marketers 10 days to stop sending e-mail after a consumer opts out, with each violation subject to a fine of up to $11,000. It also puts the onus on the advertisers to make sure their ads are in compliance, since they are the ones who ultimately benefit from online marketing.
But with many spammers concealing their identities, the Federal Trade Commission has had a rough time enforcing the Can-Spam Act (prompting cynics to dub it the U-Can-Spam Act). Not only that, but many of the ads for modern American staples like porn, pills, casinos and software don't even originate from the Pfizers and Microsofts of the world. They come from offshore front companies peddling ostensibly pirated goods, online gambling sites based in the Caribbean or hard-to-police affiliate marketers who follow their own rules.
With the government sitting on the sidelines, individuals have begun to take action. For example, Hypertouch, a small, California-based internet service provider, filed an $11.7 million lawsuit against Kraft in April for spamming 8,500 unwanted Gevalia coffee ads at its customers, citing violations of federal and state antispam statutes. A month earlier Hypertouch hit BobVila.com with a similar suit.
And that's where Joshua Baer and Brandon Phillips, the ones who created the list of "Top Ten U.S. Unsubscribe Violators," come in. (The list was recently posted, so as to coincide with the publication of this column.) Baer, CEO of UnsubCentral, which helps companies manage e-mail opt-out lists, and Phillips, president of LashBack, which sells a toolbar that can be added to Microsoft Outlook or Outlook Express that automatically unsubscribes the user from unwanted junk e-mail, say they did it because spam causes headaches for their customers. I have no doubt this is true. I'm also sure it's no coincidence that both men run companies that sell antispam products.
"We are not vigilantes," insists Baer, who also founded Skylist, an e-mail marketing software firm that counts the Boston Globe as a client. "But it hurts everybody if consumers are afraid to unsubscribe from unwanted spam because they might receive even more junk mail. If we don't do something, it could come down on our heads."
Phillips added that he'd like the FTC to receive greater funding so it could go after violators.
How did Baer and Phillips determine which advertisers violated the law? Simple. They assigned a unique e-mail address to each unsubscribe request. After 10 days were up, all they had to do was tally up all the e-mail that came to that account.
The list includes Impulse Marketing Group, WinSweepstakes, PrimeQ, Your Smart Rewards and MetaReward, which is owned by Experian, the credit report collector.
Three companies on the list -- Consumer Incentive Promotions, My Choice Rewards and Product Opinion Panel -- shared the same mailing address and telephone number that I traced to a UPS store in Delray Beach, Florida.
One of the difficulties in policing e-mail marketing is that lists of consumers who have opted out are often placed on a central site so that all the affiliates can update their databases. Problem is, there isn't much security, so all it takes is one nefarious spammer gaining access, and the great numbers of the unsubscribed become the spamified.
What did the companies on the list say? Most didn't return my calls. A lawyer for PrimeQ said he'd look into it. Joshua Blumenfeld of WinHundred denies his firm violated the law, noting he never deals in porn, which was the type of spam that was sent after the unsubscribe cutoff date. "Anyone who receives our e-mail signed up to receive our e-mails," he said. "They come to our sweepstakes website for the chance to win a thousand dollars or a PlayStation 2. Or people refer friends to take surveys: For every friend they refer they get 50 cents."
When I called the three companies claiming to use the UPS store in Delray Beach as their headquarters, I ended up talking with Dan Wright, CTO of Digital Arrow, another e-mail marketing firm, whose clients include Vermont Teddy Bear, Discover and Sears, Roebuck and Company. He told me he has been receiving complaints for promotions that aren't his -- someone has been spoofing his company's contact information at the bottom of their ads.
"There are a lot of shady people in this business," he said. "I don't want to say I'm not proud of my job, but I don't advertise what I do."
At least one company had hell to pay. After learning there was a "rogue" affiliate in its network, Vendare Media used UnsubCentral technology to root out who had been misusing its e-mail suppression list.
Vendare promises it is implementing additional safeguards to prevent it from happening again.
One small step for a spam, a giant leap for spamkind.
Here are violation review pages for the companies mentioned above:
MetaReward (and another)
Impulse Marketing Group
WinSweepstakes
WinHundred
PrimeQ (and another)
Your Smart Rewards
Consumer Incentive Promotions
My Choice Rewards
Product Opinion Panel
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Adam L. Penenberg is an assistant professor at New York University and the assistant director of the business and economic reporting program in the school's department of journalism.
