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Image spam is a type of spam, or rather, a spamming technique, in which a spam message is delivered in the form of an image. This is done in an attempt to circumvent spam filters that scan for particular keywords. This works because a user can read an image, whereas many anti-spam systems cannot.
There are two ways to look at filtering image spam. First, anti-spam systems can be improved to have better image recognition. While many spam filtering systems have this ability, accurate character recognition is difficult.
As opposed to trying to "read the image," there are various other spam detection methods, such as honeypots, message header analysis or human reporting mechanisms that can help in detection. Additionally, there are many anti-spam systems that use a combination of whitelists, blacklists and so-called gray lists that force authorized clients to re-send messages.
Given all these techniques, image spam is no longer the issue it once was. Initially, there was a flood of spam, but as systems have adapted, it is now more of a footnote to the never-ending battle of spam prevention.