DMA Encouraged by FTC Report on CAN-SPAM Effectiveness

WASHINGTON, December 20, 2005 – As the Federal Trade Commission announced today in its report to Congress on the effectiveness of the CAN-SPAM Act, much has been done to mandate best practices for legitimate e-mail and provide tools that help law enforcement authorities stem the tide of illegal, damaging and nuisance e-mails. The Direct Marketing Association (DMA) is encouraged by the FTC report and congratulates legitimate senders of email, law enforcement agencies, ISPs on their successful efforts, and looks forward to continuing to work with the FTC to make the electronic marketplace safe and successful for consumers and businesses.

As the report noted, filtering and other technologies are helping consumers see some declines in spam levels. Legitimate organizations are overwhelmingly complying with CAN-SPAM requirements and have taken significant steps to ensure that legitimate marketing messages include honest subject lines, accurate header information, a physical location address, and a prominent and easy-to-use opt-out function.

"While legitimate marketers are taking many steps to combat spam, the vast majority of what remains that reaches consumers inboxes–is coming from people who have no intention of following the law," said Jerry Cerasale, DMA’s senior vice president for government affairs. "CAN-SPAM is a necessary part of the cooperative effort that government, businesses and consumers must undertake to combat spam. The law provides the enforcement muscle that complements what e-mail providers, legitimate marketers and ISPs are doing to keep ahead of constantly-evolving technologies."

Over the past year, DMA has been active in supporting the "Safe Web Act" and in calling for stronger penalties for online criminals and greater resources for law enforcement to help identify and prosecute them. DMA would particularly like to see the FTC receive greater authority to help combat cross-border fraud and is encouraged by the progress of such legislation. Lou Mastria, DMA’s vice president for interactive & emerging media, added that most of the spam that consumers continue to see in their inboxes is being sent from hijacked addresses and through "zombie" servers – unsecured individual addresses and commercial servers that have been taken over by spammers. "The single most important thing organizations and individuals can do is to make sure their servers are secure," he noted. "When spammers aren’t able to conceal their identities, law enforcement will be better able to find and prosecute them."

To help consumers differentiate between fraudulent messages and legitimate commercial e-mail, many organizations are also taking additional steps to help consumers identify trustworthy e-mail. In October, the DMA announced that members will be required to adopt e-mail authentication systems that help verify the authenticity of legitimate commercial e-mail messages.

The DMA estimates that legitimate commercial e-mail resulted in approximately $39 billion in sales in 2004, including about $9 billion in small business sales. "We believe that e-mail can deliver great value for consumers and more dollars for the U.S. and global economies if spam and fraud can be reduced or eliminated," said Mastria.

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The Direct Marketing Association (www.the-dma.org) is the leading global trade association of business and nonprofit organizations using and supporting direct marketing tools and techniques. DMA advocates industry standards for responsible marketing, promotes relevance as the key to reaching consumers with desirable offers, and provides cutting-edge research, education, and networking opportunities to improve results throughout the entire direct marketing process. Founded in 1917, DMA today has more than 4,800 corporate, affiliate, and chapter members from the US and 46 other nations, including 55 companies listed on the Fortune 100.

In 2005, companies will spend more than $161 billion on direct marketing in the United States. Measured against total US sales, these advertising expenditures are expected to generate $1.85 trillion in increased sales in 2005, or 7% of the $26 trillion in total sales in the US economy (which includes intermediate sales). All together, direct marketing will account for 10.3% of total US GDP in 2005.