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MLM Training Newsletter

January 2000



Spencer Reese

Aggressive Network Marketing distributors have tried spamming as a method of mass-recruiting. While its effectiveness is questionable (most people hate being spammed), until recently there have been few legal reasons not to give it a try. That's now changing.

Congress is considering federal legal measures, and several states have already enacted anti-spam legislation. California has made spamming a criminal offense with a possible jail sentence. Prudent Networkers will either adopt a policy against spamming (the preferred alternative!), or companies will need to make sure distributors are taught how to comply with the current anti-spamming laws as well as those that will inevitably follow.

Federal Anti-Spamming Legislation

In its current form, the Unsolicited Electronic Mail Act of 1999 (currently before Congress) requires the Federal Communication Commission to create and maintain a list of those who do not want to receive junk e-mail. An individual who receives spam after being on the list for 30 days or longer could sue the sender for $500 per piece of spam. The bill also criminalizes sending mail without a valid return address identifying where the recipient can submit a request not to be sent future junk e-mail. In addition, Internet service providers would be allowed to opt out of transmitting spam, and they could charge spammers to cover transmission costs.

California & Tennessee

Under the new California law (effective January 1, 2000), unsolicited bulk e-mailers must place the abbreviation "ADV:" in the subject line of messages that sell goods or services. Adult-oriented spam must be labeled "ADV:ADLT."

Bulk e-mailers must also set up a toll-free telephone number or accurate return e-mail address so that recipients can request to be removed from a spam list. Violators will be subject to six months in jail and up to $500 for each piece of spam sent.

Tennessee's law is similar, but the spammer can be subject to civil liability for the recipients' actual damages, attorney's fees and costs, or, in lieu of actual damages, the lesser of $10 for each unsolicited message or $5,000 per day.


Nevada's anti-spamming statute provides that if a person transmits an e-mail that includes an advertisement, the sender is liable to the recipient for civil damages unless the sender and recipient have a preexisting business or personal relationship, the recipient has consented to receive the e-mail, or the advertisement is readily identifiable as promotional. It must also provide the name, street address, and e-mail address of the sender, and a notice that the recipient may decline to receive additional e-mail . The recipient may recover the greater of actual damages or $10 per item of e-mail received, plus attorney's fees, costs, and injunctive relief.

Rhode Island

Like the other states, Rhode Island's anti-spam law requires that the sender of unsolicited e-mail establish a toll-free number or return e-mail address. If the statute is violated, the recipient is entitled to receive $100 from the sender, plus attorney's fees and costs.


Thanks to Spencer Reese for furnishing this information. Mr. Reese is a partner in the law firm of Grimes & Reese, and a member of the Idaho, Missouri and Colorado bars. His current practice includes representing and advising Network Marketing companies on all aspects of their business. Grimes & Reese is a supplier-member to the Direct Selling Association and the Professional Association of Network Marketers. He can be contacted at 208-524-0699, or via e-mail at

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Reprinted with permission from Upline, Legal - January 2000, 888-UPLINE-1,