Email Marketing: How One Mistake Could Cost You $100,000

Learning lessonsI read two articles recently that reminded me of some important lessons.

The first one recounts several examples of people who have been the victims of boiler room scams.

Internet Marketing websites captured the victims’ contact details by offering eBooks or CD’s on how to make money online, and then turned their details over to boiler room companies.

The boiler room companies had teams of telesales staff who would then call the people whose contact details had been passed to them and sell them whatever they could, for as much money as they could.

It was all a scam, and many people lost a lot of money. Some of them are named in the article, along with the amounts they lost – they’re large amounts.

One of the people who’s named and shamed is Frank Kern, someone whose videos I’ve watched and site I’ve read occasionally.

To me, despite the fact that his approach doesn’t work for me, he was, none-the-less, a genuine person, not a scammer, and I think the article is wrong to include him alongside the real scum bags.

He is accused (in the article) of being one of those marketers who sold the contact details of people on his mailing list to the boiler room companies.

However, as he writes in this article, (the second of the two I referred to at the beginning) he didn’t pass on any contact details, but he did make a huge mistake:

He created and sold a product (Instant Internet Empires) along with the full re-sale rights, including the rights to use the same sales letter that he used.

And that sales letter included his name and earnings details.

The result was that a rash of copycat Instant Internet Empires sites sprang up, all claiming to be Frank Kern. And some of the owners of those sites did sell their customers’ contact details to boiler rooms.

This was back in 2003, when Internet Marketing was much younger than today and things like the Can-Spam Act were only just being passed into law.

The Internet Marketer of 2012 is much more aware of the need for privacy and the danger of publishing too many personal details online. None-the-less, Frank Kern’s mistake was pretty stupid, as he himself admits.

To cut a very long story short, the FTC rumbled those boiler room scams and, as part of that investigation, sued Frank Kern for having passed on his customers’ contact details.

Except that they weren’t Kern’s customers’ details, they were the details of the customers of the fake Frank Kern sites.

However, the FTC wasn’t going to be put off by that. To them Frank Kern had set up this huge network of Instant Internet Empires sites and was selling the names and addresses of people who joined his email list.

To shorten the story (again) Kern spent US$100,000 in fees and eventually settled out of court.

The lessons I was reminded of

My point in relating that story, even though it dates back a few years, is that you can never be too careful with your customer’s details.

I do recommend you read Kern’s full story to see what can happen to you if you fall foul of the FTC.

If you’re operating a mailing list I cannot urge you strongly enough to use one of the top email marketing service providers to manage your customers’ details.

They have security processes that will do more to protect your customers’ names and email addresses than you could ever set up and manage yourself (unless you’re a security consultant).

And there are plenty of other reasons:

Under the Can-Spam Act, you could be fined sufficiently heavily to be put out of business if someone successfully brings a spam complaint against you.

But if you’re operating a confirmed opt-in process, using Aweber or one of the top email marketing providers, you have a solid defence: you can prove that they confirmed their request to receive your emails.

While there are undoubtedly plenty of scam artists out there, I don’t like the way the first article leaves the impression that anyone selling eBooks online is out to fleece you. It’s simply not true.

Unfortunately, though, Internet Marketing did get itself a bad name as a result of some of the scams that have been run.

The result is that the genuine, ethical marketers have worked hard to develop a pristine reputation online and they protect it fiercely, as I do mine.

Your online reputation is probably more important than your reputation off-line, particularly if you make your living online.

In fact, it’s your most important asset, and you should protect and treasure it above all else.

If you’re in any way linked with inappropriate conduct online (let alone a scam), your business will take a hit from which it may not recover.


Martin Malden.

About the author: Martin has been working online since 2006 and focuses on two areas: 1) affiliate marketing and 2) designing and building websites based on WordPress. He has his own WordPress agency, and serves clients in Hong Kong, Australia and the UK.

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