May 12, 2006, 12:00 AM

Technical glitch causes CAN-Spam problems for Ice.com

Online jewelry retailer Ice.com has agreed to pay $6,500 in civil penalties for alleged violations of the CAN-Spam Act, under a settlement with the FTC. Ice.com says a switch to a new e-mail system caused the problems.

Online jewelry retailer Ice.com has agreed to pay $6,500 in civil penalties for alleged violations of the CAN-Spam Act, under a settlement with the Federal Trade Commission. Ice.com CEO Shmuel Gniwich attributed the violations to a technical glitch arising when the retailer switched to a new e-mail system.

In a complaint filed May 11, the FTC alleged that Ice.com sent more than 6,000 e-mail messages to consumers more than 10 business days after they had filed an opt-out request with the retailer. The CAN-Spam act requires e-mail marketers to honor opt-out requests within 10 business days.

The violations occurred between Feb. 8 and March 20, 2005, the FTC said.

Gniwich said that while CAN-Spam stipulates that retailers can’t be held liable for violations caused by technological problems, trying to explain the mix-up to the FTC would be too complicated and time-consuming.

“Whatever violation there was was non-intentional,” Gniwich says. “Basically it was a technical glitch when we moved from one e-mail system to the other. But rather than get into a lengthy six-year fight with them for $500,000, we just figured this was the best way to end this for both sides.”

The settlement-which was announced yesterday-also prohibits Ice.com from future violations of the CAN-Spam Act and includes record-keeping provisions.

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