Email Marketing: The CAP Code

Out-Law Guide | 30 Mar 2005 | 3:25 pm | 6 min. read

This guide is based on UK law. It was last updated in April 2013.

Marketing by email has become a key channel of communication for many businesses across the UK. However the level of government and industry regulation has greatly increased in recent years in this area creating what many businesses now regard as an overly complex patchwork of rules and standards.

This guide focuses on the relevant provisions of the Committee of Advertising Practice Code and practical steps which may be taken to comply with it. For further information on other areas of regulation which are relevant to email marketing, see Out-Law guides on Data Protection and The UK's E-Commerce Regulations. The latter guide under the heading "Unsolicited commercial email (spam)" provides a commentary on the Privacy and Electronic Communications (EC Directive) Regulations 2003.

The rules

The law and industry guidelines in this area are primarily made up of the following:

The CAP Code

The provisions of the CAP Code comprise the rule book for non-broadcast advertisements, sales promotions and direct marketing communications. They relate to, for example, advertisements in newspapers, leaflets, mailings, emails, text transmissions, fax transmissions, online adverts, other electronic and printed material and marketing databases containing consumers' personal information.

The 12th edition of the CAP Code was issued in 2010. Since the 11th edition which was issued in 2003, the CAP Code has contained strict provisions on direct marketing by email and SMS and the Advertising Standards Authority (the ASA) has issued a number of rulings on these provisions. 

The CAP Code is not statutory but it is not without teeth. Anyone can complain to the ASA about non-compliance and the ASA can adjudicate such a complaint. These adjudications can provide a relatively quick and easy method for a consumer to complain. The ASA decisions are published weekly on its website as well as on occasion, in newspapers and on TV and radio, potentially leading to significant adverse publicity for the organisation involved.

Media and industry organisations that subscribe to the CAP Code can refuse advertising space to anyone who breaches the CAP Code. An Ad Alert is sent out to members who can then deny space until the organisation complies. Such media and industry organisations can also remove incentives or concessions associated with membership of their body.  In addition, the ASA can refer an organisation to the Office of Fair Trading (OFT) under either the Consumer Protection from Unfair Trading Regulations 2008 or the Business Protection from Misleading Marketing Regulations 2008. The OFT can seek undertakings from the organisation or an injunction from a court.

The Training Guild case

Since the new rules were introduced in 2003 the ASA has issued a number of rulings on whether instances of electronic marketing comply with the CAP Code. One of the earliest rulings which set out the requirements of the CAP Code was issued on 10 September 2003 in response to a complaint against The Training Guild. The Training Guild sent an email advertising training seminars which, in the subject field, said "Business Seminars – Telesales & Selling Skills Made Easy". The headline in the content read "The Training Guild Business Training Seminar" and went on to say "Tele-Sales & Selling Skills ... MADE EASY... At last a selling skills course for non-aggressive sales people ... The most successful sales course in the UK ... More than 650 companies have attended ...".

The complaint was in respect of various sections in the CAP Code. Section 22.1 (which corresponds to rule 2.4 of the 12th edition of the CAP Code) required marketing communications to be designed and presented in such a way that it is clear that they are marketing communications. In relation to unsolicited email marketing communications, these should be clearly identifiable as marketing communications without the need to open them.

Section 43.4 (rule 10.13.3 in the 12th edition of the CAP Code) required the explicit consent of consumers before marketing by email or SMS with the proviso that marketers may market their similar products to existing customers without explicit consent so long as an opportunity to object to further such marketing is given on each occasion.

In relation to the first issue, the ASA found that by including "Business Seminars – Telesales & Selling Skills made Easy" in the subject field, this made it sufficiently clear that a marketing communication has been sent.

On the second issue the complaint was upheld. The ASA found that the advertisers had not obtained the explicit consent of the individual and that it was their responsibility to do so. This applied even where, in this case, they had bought customer lists in good faith believing that the people on the list were people in businesses that had opted-in to receive information about business development topics.

Ultimately the ASA was lenient in its punishment and advised the advertisers to take more care in their targeting of emails in the future, but said sanctions would follow if they did not.

US Euro Link case

In July 2012 the ASA upheld a complaint about US Euro Link plc t/a Jean-Patrique Cookware (US Euro Link). The complainant argued that he had received an unsolicited email from US Euro Link despite the ASA on a previous occasion receiving an assurance from the company that the complainant's details had been deleted from its database. The ASA highlighted its concern about US Euro Link's delayed response to its correspondence which in itself is a breach of the CAP Code (rule 1.7 12th edition). The ASA also noted that US Euro Link could not demonstrate that "there was a working mechanism in place to ensure that any member of the public in receipt of their communications could easily request to be excluded from all future mailings." For these reasons the ASA referred the matter to CAP's compliance team for further monitoring, who have the authority to take action against marketers who persistently breach the CAP Code.

The US Euro Link ruling illustrates that the ASA is prepared to undertake extensive investigations even on the basis of a single complaint.

What does all this mean?

It is helpful for marketers that the Training Guild ruling found that the subject field of the email made it clear that this was a marketing communication. However, it is worth bearing in mind that the Electronic Commerce (EC Directive) Regulations 2002 arguably go further than the CAP Code in regulating the content of subject headings. The Regulations state that unsolicited commercial email marketing communications must be clearly and unambiguously identifiable as such as soon as they are received.

It therefore appears that UK marketers are now somewhere between a jurisdiction such as California where an unsolicited commercial email must be marked "ADV:", and jurisdictions where there is no regulation and spammers can happily bombard inboxes with subject fields such as "fancy a drink?" or "remember me?".

Marketers must take care when sending unsolicited commercial email. If they have collected the information themselves then, unless the communication is solicited they will need prior consent or practically must be able to demonstrate that the communication falls within the existing customer relationship provisions. Purchasers of customer lists should seek a warranty and indemnity from the provider that those on the list have opted in to receiving third party electronic marketing communications, although this will not give them any protection under the CAP Code or the Regulations if the lists are not 'clean', i.e., a marketer sending a communication to an address on a purchased list may be deemed to have sent an unsolicited email if the addressee has not actually consented to receiving third party communications.  

Under the Privacy and Electronic Communications (EC Directive) Regulations the unsolicited email marketing provisions only apply to individual subscribers. Under the CAP Code however, a consumer is defined as "anyone who is likely to see a given marketing communication, whether in the course of business or not". However, the Code makes it clear that the requirement for consent does not apply to marketing business products to corporate subscribers, including their named employees (rule 10.14 in the 12th edition), although it will apply when marketing non-business products to named employees of corporate subscribers (rule 10.13.3 in the 12th edition). 

The CAP Code defines corporate subscribers as "limited companies in the UK, limited liability partnerships in England, Wales and Northern Ireland or any partnerships in Scotland." It also includes schools, hospitals, Government departments or agencies and other public bodies.

In many instances, the extent of the CAP Code provisions may leave many email marketers with permission-based email marketing as their only option.