I am looking at a service that claims to eliminate spam by routing all email through thier server and running it against a whitelist and if that fails, replying to the sender with an email from the recipient asking them to respond to a graphic challenge. Once they have done this they are added to the whitelist and the challenge is never repeated.

I assume, and they claim, this would prevent automated SPAM.

The URL is http://www.spamarrest.com/affl?4024566/howitworks/index.jsp

My biggest concern is the added step required for a new sender, would it annoy potential customers?

Before committing to it I would be interested to hear from anyone who has experience with this type of solution or is aware of others.

But most of all, I would like to see this added to the quiver in smarter mail as a value added incentive for resellers.

I know of some clients that have used this type of system, however I know that HostMySite.com will never do so because there are some inherent problems with challenge/response systems - the biggest being that it simply generates almost as much junk mail in the way of misdirected challenges than it prevents. You can see more details on this here:

http://www.spamcop.net/fom-serve/cache/329.html#CR

Excerpt:

Challenge/response spam filtering
Description: This "selfish" method of spam filtering replies to all email with a "challenge" - a message only a living person can (theoretically) respond to. There are several problems with this method which have been well known for many years.

1. Does not scale: If everyone used this method, nobody would ever get any mail.

2. Annoying: Many users refuse to reply to the challenge emails, don't know what they are or don't trust them.

3. Ineffective: Because of confusion about these emails, many of them are confirmed by people who did not trigger them. This results in the original malicious email being delivered.

4. Selfish: This is the problem we are mainly concerned with. By using challenge/response filtering, you are asking innumerable third parties to receive your challenge emails just so that a relatively few legitimate ones get through to the intended recipient.

SpamCop abandoned this method of filtering after a short test period in 2001. Another site discussing the problems with challenge/response:

Challenge-Response Anti-Spam Systems Considered Harmful http://linuxmafia.com/faq/Mail/challenge-response.html