FTC launches "spam" e-mail crackdown

Andy Sullivan

WASHINGTON: Federal regulators kicked off a crackdown on the junk e-mail known as

"spam" on Tuesday with an announcement that they had settled charges against

seven people accused of running an e-mail pyramid scheme.

The Federal Trade Commission said that the seven defendants had participated in a

chain-letter scam that promised returns of up to $46,000 for a $5 payment. Such chain

letters are illegal in the US.

The chain letter eventually drew in more than 2,000 participants from nearly 60

countries, the FTC said. While the consumer-protection agency has targeted some 200

Internet-based scams over the past several years, it has not until now gone after spam.

FTC Chairman Timothy Muris said the agency now had e-mail scams in its sights.

"We're going after deceptive spam and the people who send it. We want it off the

Net," Muris said at a press conference.

The agency plans to settle several more cases within six months, said Eileen

Harrington, the FTC's assistant director of marketing practices.

Spam has long been a hot-button issue for Internet users, who often find their inboxes

clogged with unsolicited offers for pornography, fake diplomas, and get-rich-quick

schemes. Internet users received an average of 571 pieces of unsolicited commercial e-mail

in 2001, a number expected to rise to nearly 1,500 by 2006, according to Jupiter Media

Metrix.

Nineteen states have passed anti-spam laws, but attempts to pass a national law have

stumbled over opposition from direct marketers who say their activities would be unfairly

limited. FTC officials said they will go after spam using existing laws that prohibit

false or deceptive trade practices.

In addition to chain letters, pyramid schemes and other scams, the agency will target

spammers who use deceptive return addresses or do not respond to consumer requests to be

taken off their contact lists, said Howard Beales, head of the FTC's Bureau of Consumer

Protection.

Spammers are not likely to face jail time or large fines from FTC actions. In

deceptive-trade cases, the agency can usually only force companies to give back profits

and pursue "structural" remedies that modify future behavior.

The seven spammers, who had been sent letters of warning by the FTC in September 2000,

agreed to refrain from participating in deceptive schemes in the future, or lying about

the legality or potential earnings from any such schemes. In addition, the defendants must

return any money they take in from the chain letter in the future, can not share their

lists of recruits, and must submit to FTC oversight of their actions.

Some 2,000 other participants in the chain letter received a warning letter from the

consumer-protection agency. While the FTC is preparing a national "do not call"

list for telemarketers, a "do not spam" list would probably not be effective,

Harrington said.

Harrington said Web users should forward spam to the FTC for analysis, using the e-mail

address uce@ftc.gov. The agency has amassed a database of 8.5 million spam messages, and

takes in an additional 10,000 per day, she said.