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12 May, 2017

Class Action and Spam

Canadian spammers are losing sleep and “battening down the hatches” in the weeks before July 1st. That’s the date when the final provisions of an anti-spam law go into effect, including the big boogey-man that most frightens unscrupulous bulk-emailers: a consumer’s right to sue.

 

Canada’s Anti-Spam Law (CASL) was passed back in 2010, but due to worries from business owners it gave ample time for companies to clean up their act before more stringent provisions went into effect. Unlike the U.S. spam legislation (the CAN-SPAM Act) which simply requires that mailers give people an option to unsubscribe and opt-out, CASL requires that consumers ‘opt in’ before receiving messages, making it more like European spam laws. CASL also makes it illegal to remotely install software updates without prior consent.

 

Beginning in 2014, government regulators took on the power to go after violators, touting hefty penalties (up to $1,000,000 for individuals and $10,000,000 for companies per violation). But the commission charged with hounding down bad actors is rather small and ill-prepared to take on every last spammer (one year into enforcement, they had received nearly 400,000 complaints and fined only three companies).

 

That’s why CASL included a private right to action for those harmed by unsolicited marketing emails. Perhaps they had seen the weak regulatory power of their neighbors to the south. Though the U.S. sees occasional prosecutions against telemarketers and fraudulent emailers, our regulatory bodies like the Federal Communications Commission can’t keep up with the zealous spammers. Also: all the money recovered in fines goes to the government, and not to the people who were actually harmed by these privacy invasions.

 

By including a private right to action, CASL deputizes an army of angry email-receivers filing in small claims courts, as well as plaintiff-side attorneys bringing forward class actions. This is the force that’s absent in the U.S. The U.S. anti-spam law, signed in in 2003, is called the CAN-SPAM Act. That’s supposed to be a clever pun about putting gross meat back in the can it came from, but because it doesn’t include the right for consumers to sue, it’s sometimes called the “You Can Spam” Act.

 

As a contrast, the Telephone Consumer Protection Act does give consumers the right to sue for telemarketing violations. There’s evidence that class actions against offenders are on the rise. These have included large settlements from banks for their harassing debt-collection calls.

 

But the U.S. email spam laws don’t have this option. State attorney generals and internet service providers who can show they’ve been “adversely affected by a violation” are the only ones who can sue a spammer. Some argue that by taking the ‘opt-out’ course, the act effectively legalized spam.

 

Some argue that all this legal wrangling and regulation hardly matters. The CASL law is useless, they claim, since the most egregious spammers — the ‘Nigerian princes’ and genital-enlargers who are fraudulently angling for your money — are based far away and have sufficient technology to shield themselves from most attempts to hold them accountable. These lawsuits will likely only target legitimate businesses who get a little too eager in their marketing attempts.

 

But others respond that junk email from legitimate businesses are also less likely to be blocked out by spam filters, making it more of a problem for consumers. Also: as long as it’s impossible to track down and stop spammers, some argue that it’s beneficial to be able to make the broad assumption that anyone calling, texting, or emailing without your consent is breaking a law and is almost certainly fraudulent. In some ways, more damage can be done with a deluge of marketing offers that include outright fraud and legitimate businesses. As more legit businesses are scared off from spamming due to big settlements and fines, it will be easier to create a culture of caution around bulk emailings.

 

But whatever comes from CASL, we have the opportunity from here to witness the workings of a similar government’s different approach to spam. We’ll be able to see if small business anxieties are founded (businesses have been claiming since 2010 that the law would mean massive bankruptcies – but others respond that any marketing plan based on spamming is already in desperate need of an update).

 

We’ll also be able to watch if tougher laws and class action lawsuits helps to tamp down on spam and bring remedies to the pestered. If so, we just might find we prefer the Canadian way.

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Author Ryan Anderson , on Twitter @RyanM_Anderson

Ryan Anderson is the CEO and productivity guru behind Filevine. When he's not designing products to make people more efficient he is racing on his bike, or watching BYU football. On Twitter, he is @RyanM_Anderson.

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