Email Mktg

Revised: 09/22/2006

Insurers Rest Easier Over E-Mail Marketing as FTC Won't Can Spam Yet
WASHINGTON June 15, 2004 (BestWire) - Insurers who use e-mail to solicit business can breathe easier in the wake of a U.S. Federal Trade Commission report, because the agency has determined that a national do-not-spam registry won't work and might even make matters worse.

The FTC's report to Congress, issued the week of June 14, means that anyone now legally using e-mail for marketing purposes won't have to change their practices--at least until the FTC comes up with a way of enforcing a 6-month-old anti-spam law.

Congress in December 2003 passed the Controlling the Assault of Non-Solicited Pornography and Marketing Act--known as the CAN-SPAM Act--which tasked the FTC with coming up with a plan and a time line for setting up a National Do Not E-Mail Registry, analogous to the National Do Not Call Registry established last year. The act also calls for the FTC to "explain any practical, technical, security, privacy, enforcement, or other concerns and explain how a registry would be applied with respect to children with e-mail accounts."

In its 60-page report to Congress, however, the FTC said that a do-not-spam registry would not reduce the amount of spam that consumers receive. In fact, the FTC said, it might actually increase it. Meanwhile, the report said, a do-not-spam registry could not now be enforced. The commission's vote to issue the report was 5-0.

The problem, the FTC said, is that there is currently no way of authenticating e-mails to keep spammers from hiding their tracks to avoid law enforcement or get around anti-spam filters. The FTC said it would hold an authentication summit sometime in fall 2004 to figure out how to authenticate the source of spam traffic and to get such a program in place as quickly as possible.

The FTC looked at three ways of creating a national registry: one containing individual e-mail addresses; one containing the names of domains (such as "earthlink.net" or "hotmail.com") that don't want to receive spam; and a third registry of individual names that would require all spam to go through an independent third party that would forward the spam only to e-mail addresses not on the registry.

After consulting with more than 80 parties representing the country's largest computer, Internet and database management companies--including Google, Microsoft, Yahoo, and AT&T--the FTC concluded that "all three possible registry models could not be enforced effectively."

Creating a registry of individual e-mail addresses would likely result in those addresses getting more spam, since it would serve as a directory of valid e-mail addresses for spammers. "It ultimately would become the National Do Spam List," the report said. A registry of domains would have "no impact," the report concluded, while a third-party forwarding service could cripple the e-mail system with traffic.

"For the foregoing reasons, the Commission concludes that, under present conditions, a National Do Not E-Mail Registry in any form would not have any beneficial impact on the spam problem," the commissioners wrote. "It is clear, based on spammers' abilities to exploit the structure of the e-mail system, that the development of a practical and effective means of authentication is a necessary tool to fight spam. Therefore, the Commission encourages the private market to develop an authentication standard."

That, the commission added, may solve the spam problem on its own, rendering a registry unnecessary.

As part of its report, the FTC issued a request for information or RFI seeking input from the Internet sector, asking how they would develop an authentication program. That information will be incorporated into the FTC's authentication summit later this year.

Though no one entity has compiled data on the practice, insurance trade groups say their member companies are increasingly using bulk e-mail to communicate with their customers. Sometimes, those bulk e-mails cause Internet service providers to block them unilaterally. Several states have meanwhile considered their own anti-spam laws. Last year, the National Association of Independent Insurers--now the Property Casualty Insurers Association of America--fought a New York State law it deemed too restrictive.
(By Chris Grier, Washington bureau manager, BestWeek: Chris.Grier@ambest.com) BN-NJ-06-15-2004 1628 ET #

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