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In a survey to test whether top e-tailers are allowing consumers to opt out of receiving promotional or marketing messages, the FTC has determined that 89 percent of the online merchants it tested are honoring requests to halt future mailings.

The CAN-SPAM Act, which became effective January 1, 2004, requires that senders of commercial e-mail provide recipients with a clear and conspicuous notice that they have the right to opt out of receiving future marketing messages, provide a mechanism to allow them to exercise that right, and honor requests to be removed from future mailings.

To assess whether e-tailers were complying with the opt-out provisions of the CAN-SPAM Act, FTC staff developed a list of 100 top e-tailers – those who make significant use of the Internet to market their goods or services – and visited their sites. Most of the sites solicited consumers to sign up for special offers, promotions, updates and newsletters via e-mail. FTC staff created three new e-mail accounts and opted in to receive the offers and promotions once for each of the three e-mail accounts and monitored the accounts for six weeks. Then staff notified the e-tailers they wished to stop receiving commercial e-mail messages.

The study showed a high rate of compliance with the CAN-SPAM opt-out provisions. All of the e-tailers who sent e-mail to the FTC accounts provided clear notice of recipients’ right to opt out of receiving future mail and provided recipients with an opt-out mechanism. Eighty nine percent of the e-tailers honored all three of the opt-out requests made by FTC staff and 93 percent complied with opt-out requests for at least some accounts.

Posted under Privacy

Since August 1, 2005, companies that send “prescreened” solicitations of credit or insurance to consumers will be required to provide simple and easy-to-understand notices that explain consumers’ right to opt out of receiving future offers. The Fair and Accurate Credit Transactions Act of 2003 (FACTA) required the FTC, in consultation with the federal banking and credit union agencies, to prescribe the format, type size, and manner for these opt-out notices. The FTC also is issuing a new consumer education brochure to help consumers understand the prescreening process and what they should consider in deciding whether to opt out.

Prescreened offers of credit or insurance – sometimes called “preapproved” offers - are sent to consumers unsolicited, usually by mail. They are based on information in consumers’ credit reports that indicates that the individuals receiving the offer meet the criteria set by the company making the offer. The Fair Credit Reporting Act (FCRA) limits the circumstances in which consumer reports can be used to make prescreened offers, and all such offers must include a notice of consumers’ right to stop receiving future prescreened offers. The FTC Rule is intended to make these notices simple and easy to understand.

The Rule adopts a “layered” notice approach that requires a short, simple, and easy-to- understand statement of consumers’ opt-out rights on the first page of the offer, along with a longer statement containing additional details elsewhere in the offer. Specifically, the short statement informs consumers about the right to choose not to receive future prescreened solicitations and specifies a toll-free number for consumers to call to exercise that right (1-888-5-OPTOUT). Consumers may choose to opt out for five years or permanently, and may opt back in at any time by calling the same number. The longer part of the notice provides consumers additional information about prescreening that is required by the FCRA. The Rule includes model short and long notices.

FACTA also requires the FTC to educate consumers about prescreened offers of credit or insurance and their opt-out rights. The FTC has created a new consumer brochure, “Prescreened Offers of Credit and Insurance,” which explains how the prescreening process works and provides some of the benefits and consequences of receiving these offers and of opting out.

Copies of the Rule and the FTC’s brochure, “Prescreened Offers of Credit and Insurance,” are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580

Posted under Privacy