FTC Charges Experian with Spamming Consumers with Marketing Emails They Could Not Opt Out Of

On August 14, 2023, the Federal Trade Commission announced that it will require Experian Consumer Services, which offers consumers access to their Experian credit information, to pay $650,000 to settle charges it sent consumers unsolicited email without offering them a way to opt out of such messages, as required under the CAN-SPAM Act.

In a complaint filed by the Department of Justice on behalf of the FTC, the agency says that California-based Experian Consumer Services (ECS), also known as ConsumerInfo.com, Inc., spammed consumers with marketing offers after they signed up for an account with the company in order to manage their Experian credit report information.

In the emails, the FTC alleges that the company failed to provide clear and conspicuous notice of consumers’ ability to opt out of receiving additional marketing messages and a mechanism for doing so, in violation of the CAN-SPAM Act, according to the complaint.

“Signing up for a membership doesn’t mean you’re signing up for unwanted email, especially when all you’re trying to do is freeze your credit to protect your identity,” said FTC lawyer Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.  “You always have the right to unsubscribe from marketing messages, and the FTC takes enforcing that right seriously.”

Consumers who wish to freeze or take other steps to manage their Experian credit information online must create an account with ECS.  The complaint charges that consumers who signed up for a free membership account with ECS were then sent emails promoting Experian’s products and services such as one touting Experian Boost, which promotes ways for consumers to boost their credit scores, and another that offers a free “Dark Web” scan.  The FTC alleges that the emails did not contain an unsubscribe link consumers could use to keep from receiving more marketing emails.

Experian includes a notice at the bottom of these emails informing recipients that they are receiving the messages because they “contain important information about your account.” Contrary to Experian’s claims, however, the complaint charges that the emails are not related to consumers’ accounts and instead market or promote products and services.  Therefore, the emails must provide consumers with a way to unsubscribe from receiving future messages.

The CAN-SPAM Act defines “commercial electronic mail message” as email “the primary purpose of which is the commercial advertisement or promotion of a commercial product or service.”  And if the message meets that definition – which the FTC alleges the defendant’s emails most certainly did – the law requires companies to take certain steps to protect consumers from receiving unwanted marketing messages in the future.  And that, says the FTC, is where the defendant opted out of its legal obligations.

In addition to the $650,000 penalty, the proposed order prohibits ECS from sending marketing emails that fail to offer a mechanism to opt out of such messages. The order must be approved by a federal court before it can go into effect.

Now is a good time to take a closer look at your company’s email practices in order to ensure that they line up with the federal CAN-SPAM Act and state email marketing legislation.

Richard B. Newman is a digital advertising practices attorney at Hinch Newman LLP.  Follow FTC defense lawyer on Twitter. 

Informational purposes only. Not legal advice. May be considered attorney advertising.