Investigation: The NZ Govt is weakening its grip on nuisance spam

Anyone using Gmail, Outlook or any other popular email service or application has one; a folder that is supposed to catch all the detritus of worthless email you don't want. A "spam" folder, which in years past overflowed with promotions from your local real estate agents, hair rejuvenation offers and sometimes, notes from cherished people whose addresses your computer didn't recognise.

Nuisance spam has decreased markedly in 2021 but in 2007, a widely-disseminated factoid of unknown origin, suggested that up to 85% of email sent in that year was unwanted spam. Spam had been circulating in newsgroups and chatrooms since the 1980s, but by 2007 New Zealand thought it was time to introduce a law to curb its proliferation. In September that year, the Unsolicited Electronic Messages Act (UEMA) became law and it is the only civil statute we have that deals with nuisance messages.

In 2021, it seems that all has been forgotten. As of November, only five formal warnings to businesses had been issued by its regulator, the Department of Internal Affairs. Compare this with 152 such warnings issued in 2010 and it's easy to wonder if the regulator finds spam a bit stale and unfashionable these days. Discerning the relevance of the law, and the pertinence of enforcing it in 2021, might be aided by examining the statute itself - what it is, and what it isn't.

The UEMA in a coconut shell

The UEMA is a law of civil jurisdiction. All matters treated by it use civil proceedings and remedies, most of which can be enforced outside of a court. The Act doesn't mention the word "spam" at all, preferring the more elegant terms "electronic message", "commercial electronic message" and the lattermost's woeful congener, the "unsolicited commercial electronic message".

Two important definitions are noteworthy in section 4: A commercial electronic message is one that markets or promotes things like goods, services, land or an interest in land. It also may allow more nefarious activity such as the assisting or enabling of a person to obtain a financial advantage or gain dishonestly from another person. Commercial electronic messages do not include those containing quotes or estimates, requested by a recipient, or details of warrantees, contracts or loans involving a recipient, or product safety information pertaining to products used by a recipient.

Conversely, this section states that an unsolicited commercial electronic message: "means a commercial electronic message that the recipient has not consented to receiving.

The Act focuses on commercial electronic messages and sections 9 to 11 prohibit these from being sent. A message is deemed unsolicited if the sender does not provide accurate sender or authoriser information, accurate details enabling the recipient to contact the sender and where a clear user-friendly unsubscribe facility is absent. Section 11 states that unsubscribe facilities must allow the recipient to respond to the sender's principal message via the same means of communication by which the message was sent, must be of no cost to a recipient and must be useable for 30 days after a message has been received.

Section 13 prohibits the use of address-harvesting software and harvested address lists in connection with the sending of unsolicited mail. Section 15 prohibits third parties from being involved in spamming or aiding or abetting spammers or those using harvesting software or harvested lists to send spam.

Section 18 is pivotal to enforcement as it defines a "civil liability event" as being any breach of ss9-11, 13 and 15. Any individual can use evidence of one or more civil liability events to apply to the High Court for an injunction requiring the offender to perform actions to remedy their breach(es) or restrain them from activities that may further contravene the Act. The regulator, (the Department of Internal Affairs) can use civil liability events to enforce a range of penalties. They range from formal warnings, at the light end, to civil infringement notices, which incur a fine per breach. Enforceable undertakings, where an offender agrees to terms of future compliance with the regulator, are another penalty available to deter further offending.

At the pointy end of repeated offending, the High Court can, on the application of any person or the regulator, award pecuniary (non-compensating) penalties or financial compensation to victims.

This Act's prime concerns are domestic and deal mainly with offenders and messages that have a New Zealand link. It contains no express powers which involve actors based solely overseas, nor does it contain enforcement powers within foreign territories.

The UEMA is not concerned with voice spam; that is, high volumes of calls made by machines or people. It has no jurisdiction over the activities of telemarketers or habitual faxers and it contains no criminal prohibitions on scammers. Scamming is dealt with by ss248 – 252 of the Crimes Act 1961. The UEMA's only intersection with scams is where they violate rules on sender disclosure and unsubscribe facilities, outlined in sections 9 to 11, and where they involve the activities of third parties to scamming operations, (through section 15).

A history of enforcement to date

It seems that even with the regulator's earnest but limited cooperation, tracing a history of enforcement by the Department of Internal Affairs since 2007 is impossible. The DIA website, is, frankly a dog, just as the amorphous collection of data presented about complaints, and actions taken on complaints, is an unappetising "dog's breakfast".

No data on numbers and types of enforcement actions was available for 2007 to 2009 on the DIA's website; a request for such data went unnoticed, amongst several other similar requests, which were only partially fulfilled. The enforced actions record begins (with totals per category only) in 2010.

It seems the Department tried at one stage to provide data on the number of complaints received, and their nature, (via email or via text-message) but this set of doubtful information runs out in 2013; no one thought to update it to the present, eight years later. Data on complaint types and numbers, nowhere precisely indicates which complaints relate to harmful spam and scams, and which relate only to the "nuisance" spam dealt with in the UEMA. A further dataset from 2013 to 2021, supplied by DIA, also failed to divide the two categories effectively, making it impossible to tell how many complaints can be directly related to specific enforcement of the Act during this later period.

The only instructive data subset available to a hungry journalist outlines enforcement actions from 2013 to 2021 and this helpfully names all the companies against whom various actions were enforced.

The formal warning is the favourite compliance instrument in this nine-year period with a range from 51 issued in 2014, to five issued in 2021. Civil infringement notices, which always incur fines, were the next most popular tool, with a range from one in 2017, up to five in 2020 with two of those being issued against a single company.

Only two enforceable undertakings were issued in this period and just four pecuniary penalties were awarded to the Crown, in the High Court, the most recent being in 2019.

Examination of the whole fragmentary dataset on enforcement shows civil infringement notices spiked in 2010, when 15 were issued. A search of High Court Registry records and the DIA data reveals that a total of only five hearings have awarded pecuniary penalties to the Crown, since the Act came into force.

Companies featuring multiple times as first-time and repeat offenders include real estate agents, used car dealerships, marketing firms, liquor outlets and computer sales and service companies.

Comments from the regulator

Joe Teo is manager of the digital messaging and systems team, located within the digital safety group of the DIA. He says the apparent relaxation of enforcement, arises from a profound change in his team's focus.

"Around 2016 there was a shift in focus from using the pointing of the stick to taking more of an educative approach to how we regulate this industry. Rather than taking enforcement action we'll give you the benefit of the doubt and send you out educational material or advice," he says. "90% of the time that's been a really good approach where we work with industry to get them compliant with the UEMA."

Teo believes repeat offending has decreased largely because business has reacted favourably to the new approach. He says the dramatic fall in harsher penalties than the formal warning, is a reflection of greater awareness of the Act in general.

"In terms of nuisance messaging, businesses are actively coming to hour website, reading about the Act and actually they are more cognizant of the fact they need to get consent from people to send marketing messages or have the unsubscribe facility on their messages. With that high level of compliance we're not having to engage industry so much. Even when we do, it's more proactive than reactive engagement," Teo says.

But a sinister change in the intent of spam and the DIA's response to such change is also reducing efforts the Department makes to enforce the Act.

"What we are finding is a really big shift from nuisance messaging to harmful messages. That's your typical scam-type messages which are being sent out to deceptively get people to click on harmful links, to link through to harmful websites or to steal credentials or which invite people to input banking data or which may defraud people," he remarks.

Teo offered a shocking and possibly notional rather than real percentage to reflect the magnitude of this change.

"In the third quarter of this year, nuisance messaging has gone down to 0.4% and the rest of it, 99.6% would be harmful messaging," he notes.

Sceptical readers may wonder if any verifiable data, from which these unusual percentages could be generated, was made available. Well, no it wasn't and Teo and his team couldn't provide similar revelatory figures for the first and second quarters of 2021, or for any quarter of 2020, despite being asked twice to do so.

If figures are a little patchy, Teo says the role his department now takes in attempting to stem harmful spam is solid and expanding by the year.

"Our prime role is around disruption of harmful messages; working with intenet service providers to see if we can prevent these messages being received by the new Zealand public," he says. "We'll use intelligence from data we get and work with ISPs and telecommunications providers to see what we can do on a voluntary basis using a collaborative approach. We're often saying that we're seeing messages and asking them to redirect or stop their customers receiving them, very much like an email filter."

The UEMA, Teo says, still has force and relevance in 2021 but he acknowledges some reform of the entire anti-spam legal toolkit is due.

"I'd be very open to a complete review across the board; the Crimes Act and the UEMA to ask the question of whether they are fit for purpose," he remarks. "The original intent of the UEMA was to regulate nuisance messaging for marketing messages. We can say that's been a success but on the other hand it is appropriate for us to review in terms of the harmful messaging space. I'm not just talking about this Act, but the whole legislative landscape as well because we deal with other partnering agencies and other pieces of law and have to manage more effectively, the way the internet is evolving.

Some industry insights

The 2007 Act was informed by several non-government bodies representing internet service and telecommunications providers, marketers and those interested in privacy and internet safety. The Internet Service Providers Association (ISPANZ) produced a comprehensive code for its members and their customers on dealing with spam and using their platforms to fight spammers.

The chief executive of ISPANZ, David Haynes, was amused when I enquired about this code, saying I was the first person to ask about it since he took up his role in 2016.

"My personal experience is that email systems have become much smarter at dealing with spam and the vast majority is filtered out automatically," Haynes observes.

"Email systems also have limits on the number of addressees that you can have for any one email, making it harder for spammers to reach out to large numbers of victims. The Act deals with commercial spam, and it has been useful in that area. We are now all used to being asked for permission to opt in to marketing emails, finding that they have an 'unsubscribe' function, plus businesses have realised that annoying their customers is not a good way to do business. The Act is therefore still relevant as it sets the legal requirements for businesses to comply with but we don't think about the Act much now because compliance is so high."

The Marketing Association was involved in the first consultations on the Act. It has a set of guidelines on data best practice, which were updated in June 2021. These make specific mention of the UEMA and offer solid guidance on how to avoid offending against it.

Keith Norris, the association's compliance consultant, says he still spends a lot of time on this statute.

"I would say 30% at least of my advisory work is on and around the UEMA," Norris says. "Marketers are pretty smart but not exactly enamoured with learning the law. If you then take in the service provider aspect of marketing, such as photographers, agencies and designers, they are not of a bent to learn the law that well. The Marketing Association is there to help them with advice and to frame their communications within the law."

Norris says his association has always had a close relationship with DIA's Digital Messaging Team, but he admits this has been less important in the past three years. He believes marketers know they're being judged by their customers and that they are hesitant to infringe on the UEMA's powers, as their customers become more sophisticated in their own use of electronic messages and mail.

He doesn't see reform of the Act as urgent but suggests an improved law could fill at least one major gap.

"I think they have to look very closely at social media and how that is used. At the moment there are a couple of versions of a code of practice but commercial messaging via social media needs to be looked at very carefully and some base rules need to be put in place. It wouldn't hurt if they were part of a new Act.