Email Marketing Rules

Email can be one of the most powerful and cost effective forms of marketing for small to medium business.

But there is more to email marketing than crafting the right message.

Since October last year the Federal Court has imposed penalties totalling $22.46 million for spamming; a dramatic reminder for businesses to comply with the Commonwealth Spam Act when preparing their marketing campaigns.

The Court’s imposing of million dollar penalties upon both directors and managers of the companies involved reinforces the need for business owners to have adequate controls, such as training and approval processes, in place to ensure that they and any staff meet their compliance obligations.

With only three rules, email marketing compliance obligations for Australian businesses are relatively simple.

Rule #1 Obtain Consent

In the majority of cases recipients must consent to receive the email, or have an existing relationship with your business.

Many businesses already provide customers the ability to opt in to receive newsletters and promotional offers. Over the past couple of years there has been a trend towards websites where people who do not wish to receive marketing emails have to opt-out of receiving them by de-selecting pre-checked tick boxes. The regulator, the Australian Communications and Media Authority, considers that consent is given through deliberate action to give consent, such as checking a tick box, not de-selecting a pre-checked tick-box.

The ACMA also warns against the practice of subscribing potential customers to your email distribution list on the basis of their one-off enquiry.

Running competitions that require contact details to enter is a common technique for building a database for future email campaigns. But it should be made clear to entrants that they may receive promotional offers.

Buying email address lists of people who have signed up to receive offers from any company is one of the fast ways to build an email marketing distribution list. But it is your responsibility to ensure that the list only contains addresses of people who have consented.
Using software to ‘harvest’ email addresses from the web is not permitted, nor is using email addresses obtained through harvesting.

Consent is the most complicated aspect of the Spam Act, but the ACMA website offers FAQs and examples to help explain what constitutes consent.

The important thing for SMBs to remember is that they must be able to prove, if necessary, that the customers have consented to receiving the email.

Rule #2 Include Contact Details

Your business name and contact details must be in the email. This sounds like common sense. For SMBs who have limited brand recognition this is simply good business – you want people to be able to contact you! The contact details must be valid for 30 days after the message is sent.

Rule #3 Unsubscribe Facility

Have you ever found yourself on a ‘snail mail’ marketing list with no means of escape? It’s certainly frustrating. Commercial email messages must contain a functional ‘unsubscribe’ facility to allow recipients to opt out of receiving further emails from your business. Clear instructions must be provided on how to use the unsubscribe facility, which is to be operational for at least 30 days. Unsubscribing is to be free or low cost to the customer. Businesses must honour an unsubscribed request within five working days.

These same rules apply to other forms of electronic communication including SMS and MMS.

While million dollar fines would financially destroy most SMBs, less extreme enforcement options available to the ACMA can have a detrimental impact on business.

Given the public’s dislike of spam, enforceable undertakings and even warnings that the ACMA often make public can result in significant reputational damage.

With financial penalties of up to $1.1 million per day and other enforcement options with the ability to significantly harm business reputation the Federal Court was probably correct to describe it as “commercial suicide to seek…gains via contraventions of the Spam Act”.

Blue Mercury Consulting are compliance and risk consultants for small business. They publish a free e-magazine called Queensland Compliance Monthly for small and medium-sized businesses to keep up to date with their regulatory compliance obligations.