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FTC takes spammer to court

In keeping with its promise to crack down on spammers, the Federal Trade Commission files a complaint in federal court against a junk email firm.

In keeping with its promise to crack down on spammers, the Federal Trade Commission has announced it is taking its first junk emailer to court.

The FTC asked a federal district court in a complaint to "permanently prohibit the seller of an alleged bogus business opportunity from spamming the Net with his scheme," according to the FTC.

Last month, the FTC announced that it is stepping up its enforcement against spammers and sent out 1,000 letters putting them on notice that they could face penalties for sending out fraudulent email.

Spam--the practice of sending thousands of unsolicited pieces of email to people over the Net--is not illegal. But advertising false and misleading claims is, and the FTC is clearly using this case to set a precedent and to warn junk emailers that they could wind up in legal trouble if they mislead Netizens.

The complaint announced yesterday is a civil action and calls for the defendant to pay fines and restitution to victims.

It names a company based in Southern California, alternatively known as Internet Business Broadcasting, Internet Business Bureau, and Interactive Consulting Systems. It also names individuals Audrey Reed and Dorian Reed.

It alleges that the defendants used email, the company's now-defunct Web page, and telemarketing to made fraudulent claims about promised advertising rate returns that customers could get by advertising in the company's Internet newspapers.

"Both their spam and their Internet Web site offered a 'guaranteed' return on investment, or a full refund to investors. Consumers' investments ranged from $5,000 to $7,500," according to the FTC.

Monica Spivack, the attorney in charge of the complaint for the FTC, said the potential loss to investors was several thousand dollars because the business owners "were making earnings claims that were false."

She added that the suit actually was filed last month, but the FTC waited to publicly announce it, hoping it could serve notice to all the defendants. It still has not served all of them.

The defendants could not be reached for comment.

Today, antispammers who have been trying to find a way to rid the Net of junk mail applauded the FTC's stepped-up enforcement.

The suit shows "the FTC is willing and able to prosecute scammers who make their pitches by email. A large fraction of the spam sent today is plainly illegal under the Federal Trade Commission Act, and the FTC is very experienced in going after this kind of scam," said Jason Catlett, president of Junkbusters.

Catlett added that the FTC might be further emboldened to pursue spammers who forge their headers and return addresses. "A success there could cause a huge reduction in the amount of spam, because spammers will have the choice of either accurately identifying themselves and receiving massive flames, or risk having the feds after them. The FTC may turn out to be a far more effective force against junk email than any of the dozen antispam bills being considered in the nation's legislatures," he said.