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LJN NewslettersNewsSectionsThe Corporate Counselor

Rules Governing Fax and E-mail Ads

BY James H. Laskey, Fernando M. Pinguelo,
January 28, 2009

The importance of having a robust compliance policy to review the content of proposed advertisements is well-known and widely accepted. But what may not be as familiar is the need for a separate policy focused on the means of disseminating such advertising. In a technology driven world, it makes sense for businesses to capitalize on the use of electronic communications to increase the number of consumers they reach, and businesses more than ever rely on direct advertising through e-mail and fax promotions. However, an advertisement that would raise no issues if disseminated by mail or in the print media can create major headaches for in-house counsel if the means of distribution is fax or e-mail.

Unlawful Direct Advertising

Unlawful direct advertising through e-mail and fax promotions can be financially devastating, and cases that have made the headlines illustrate the potential devastation. For example, in a well-publicized case from Georgia, 1,321 recipients of improper unsolicited fax advertisements sued a Hooters restaurant under federal law and received a $12 million jury verdict against the chain. Similarly, the Dallas Cowboys and the AMF bowling alley chain each settled cases involving unsolicited faxes for over $1 million. To further accentuate the timeliness of this issue, on the day we sent this article to the publisher, a class action suit was filed in the federal District Court of New Jersey alleging defendants “sen[t] out thousands of unsolicited fax advertisements to the plaintiff and class without permission.”

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