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.