Spam's New Rules: Your Association's Duties Under the New Law

By Mike Thiel

With all the federal regulations these days on how REALTORŪ associations and members can market themselves, it's no wonder there's confusion. From the recent implementation of the Do Not Call Registry to the postponed do-not-fax rules to the new anti-spam legislation with its ever-developing set of guidelines, there's a lot to keep up with. Take a look at the chart below for quick descriptions.



Law: Do Not Spam
(effective: Jan. 1, 2004)
Impact on associations: Low
Impact on members: Low

In a nutshell: The CAN-SPAM Act does not itself prohibit the sending of commercial e-mail. It does, however, impose requirements on senders of commercial e-mail messages, including: prohibiting certain fraudulent and misleading practices; requiring senders of commercial e-mails to label messages accordingly; and giving recipients a means to opt out of future mailings from those senders.

Law: Do Not Call
(effective: Nov. 1, 2003)
Impact on associations: Low; associations typically don't use cold calling as a member recruitment tactic
Impact on members: Moderate to high, depending on how much business cold calling brings you do

In a nutshell: For associations and members, the do-not-call rules say that if you conduct cold calling, you must make sure you are not calling anyone on your company's or the national do-not-call list.

Law: Do Not Fax
(postponed until Jan. 1, 2005)
Impact on associations: Moderate; associations often fax forms and other materials to members
Impact on members: Moderate; e-mail has eclipsed faxing as a solicitation method

In a nutshell: Although the rule hasn't been finalized yet, the version that was introduced this past fall would require companies to obtain written permission before sending unsolicited faxes, even if there is an established business relationship. Now may be the time to create a strategy to obtain the permission of members as a part of dues billings or other communications to members.


Effect on you

Let's take a closer look at the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, known as the CAN-SPAM Act. Although this law doesn't ban the use of e-mail in marketing products or services, many believe it was the threat of just such a ban on the state level that led to the act's rapid passage at the end of 2003. The U.S. Congress specified in the act that all state and local laws regulating the sending of commercial e-mail, many of which would have banned unsolicited e-mail and allowed recipients to sue, were preempted by this federal law. Instead of banning bulk commercial e-mail messages, Congress elected to regulate the use and misuse of commercial e-mail.

The first important point to understand is what Congress means by "commercial" e-mail. Commercial e-mail messages are those that are primarily for the purpose of advertising or promoting a product or service. For example, e-mail from your association to your membership advertising next month's continuing education classes is commercial e-mail because you are selling the classes. E-mail from your association to your membership containing the chairman's monthly column on industry trends is not commercial e-mail because it is solely informational.

Yet determining whether an e-mail that contains both news and promotions is primarily commercial gets difficult because the Federal Trade Commission has yet to further define the meaning of "primarily" in its regulations.

The act also defines a few types of e-mail that are not included under the definition of commercial e-mail messages, specifically "transactional" and "relationship" messages. The act says that transactional and relationship messages deal with (1) transactions that the recipient has already agreed to or (2) notification concerning a change with respect to a subscription, membership, or comparable ongoing commercial relationship involving the ongoing purchase or use of products and services offered by the sender. For example, e-mail from your association to a member containing detailed information on the time and location of a continuing education class that the member has purchased is transactional and therefore not commercial.

Although the FTC may further elaborate on the definition of transactional and relationship messages, at present the act does not affect purely informational messages regarding membership issues.

The act also doesn't distinguish between e-mail that is to one person or your entire membership; the scope of distribution is irrelevant. The act regulates all commercial e-mail messages and also doesn't distinguish between requested and unsolicited e-mail. The CAN-SPAM Act allows companies to send e-mail ads to potential customers even when the recipients have not given prior consent to such mailings and even when the sender does not have a pre-existing or current business relationship with the recipient. The CAN-SPAM Act simply establishes new requirements for all commercial e-mail.

How you must comply

Because there are no exceptions to the law for existing business relationships or membership relationships, all REALTORŪ associations must comply with the following CAN-SPAM Act e-mail regulations when they send commercial e-mail: (1) The "from" information on every message, including both the name of the sender and their electronic domain and address, may not be false or misleading; (2) the subject line of the message may not be deceptive so as to mislead the recipient about the content of the message; (3) the message must include the physical address of the sender; and (4) the message must include a means to opt out of receiving future commercial messages-either a reply e-mail address or other Internet-based communication such as a link to a Web site.

Except for the opt-out feature, most associations probably follow these simple guidelines already. So let's look at the opt-out requirement.

What can your members opt out of receiving?

When a member receives your association's commercial e-mail message and elects to opt out, you can no longer send that member any commercial e-mail. However, your opt-out system can be expanded to allow the member to choose what type of commercial e-mail to opt out of. For example, you can set up your opt-out software to allow members a menu of opt-out options-such as, only notices of product sales or solicitations from your affiliate partners-as long as one of the options allows the member to opt out of receiving all future commercial e-mail.

In addition to the four requirements above, if your commercial e-mail is unsolicited it must also include a clear and conspicuous notice that the message is an advertisement, which may appear in the subject line or in the message itself. Generally, a message will be considered unsolicited unless it relates to a current transaction. Sending a member who previously bought forms a message about the opportunity to buy more forms would be an unsolicited message.

If your association is not currently including the act's required information in its commercial e-mail and does not have a method for receiving, tracking, and honoring opt-out requests, you are in violation of the CAN-SPAM Act.

Will the CAN-SPAM Act stop spam?

Despite the CAN-SPAM Act's rules, all indications point toward a massive increase in spam. In fact, the CAN-SPAM Act may have little impact on unethical businesses that already engage in fraud or deception via e-mail. Those enterprises will locate their servers offshore or take other measures to avoid prosecution and will simply continue to operate as usual. Yet the regulations may help rescue the image of e-mail marketing and provide a mechanism for e-mail recipients to have some control over spam.


Here are some examples of the types of e-mail messages you can and cannot send to members who have opted out of receiving your association's commercial e-mails.

If a member has opted out of receiving all of your association's commercial e-mails, you CANNOT send that member the following:

o Class promotions (except for free classes at which no products or services will be sold or promoted)
o Event promotions (except for free events at which no products or services will be sold or promoted)
o REALTORŪ store sale promotions
o Annual conference or meeting promotions (if members have to pay to participate)
o Annual charity benefit or annual member outing promotions (if members have to pay to participate)

If a member has opted out of receiving your association's commercial e-mails, you CAN still send that member the following:

o Dues bills
o Notice of new membership benefits
o Notification of pending arbitration hearings
o The association's electronic newsletter or magazine, as long as there is no advertising of association or third-party products or services
o RPAC solicitations
o Messages recruiting volunteers to serve on a committee or run a charity event

Note: The information above reflects how association-related e-mail is likely to be assessed under the CAN-SPAM Act. However, the FTC is in the process of clarifying many terms in the regulations and these estimations may change.

For more up-to-date information: Access the Field Guide to Anti-Solicitation Laws

Mike Thiel is an associate counsel in NAR's legal department. He can be reached at

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