FTC Declines to Prosecute Bidz.com for CAN-SPAM Violations

Online jewelry retailer Bidz.com has announced that the FTC has decided not to pursue charges related to its investigation of the company’s email practices. The investigation, which was in response to numerous consumer complaints regarding the company’s alleged refusal to honor opt-out requests, began in 2009. The CAN-SPAM Act mandates that businesses must include clear and easy to follow unsubscribe instructions on all commercial email and honor all opt-out requests or face stiff fines.

“We are pleased with the decision of the FTC staff, as we have cooperated fully throughout the investigation,” said David Zinberg, the Company’s Chief Executive Officer. “We take very seriously our, and our marketing partners’, obligations relating to email marketing. This favorable result will allow us to concentrate on our core business.”

The company settled a lawsuit related to the spam complaints last month shortly after a U.S. District Court judge denied the plaintiff’s request for class action status, a move that may have helped contribute to the FTC’s decision.

Bidz.com, an auction site similar to eBay but offering jeweley, gifts, and fine art only, has a long history of troubles. Last year the SEC opened an investigation into its inventory accounting practices and it also found itself the target of several lawsuits accusing the site of shill bidding. A separate class action lawsuit was also filed against them, accusing them of securities fraud.

While the company insists there has been no wrong doing and the SEC is still investigating, it’s clear they have some serious PR messes to clean up.