FTC targets deceptive spam

The Federal Trade Commission (FTC) and 12 state and local law enforcement officials have launched an initiative to fight fraudulent spam and Internet scams.

Yesterday, the FTC said in a statement that it had filed three more complaints against three spammers and settled with four others who used spam to promote chain e-mail schemes and were caught in an FTC sting.

In addition, the FTC said it has sent letters to 100 spammers who sent similar chain letter or pyramid scheme e-mails, warning them that those e-mails appear to be illegal and that law enforcement agencies could take action against them if they continued their fraudulent schemes.

Although sending spam isn't illegal in the U.S., the FTC monitors spammers to ensure that they don't engage in deceptive or unfair trade practices, which is illegal. The spammers sued by the FTC were all charged with breaking those laws.

According to the agency, one defendant was charged with using deceptive spam, including the unauthorized use of logos of well-known financial institutions, including The Prudential Bank and Trust Co. and Fannie Mae. The logos were used in spam allegedly designed to trick consumers into disclosing personal financial information.

According to the FTC, the spammer, whose name wasn't released, said he was offering consumers competitive refinancing and refinancing loans. The defendant also used a fake return address so that any undeliverable messages went to e-mail addresses that weren't affiliated with him, causing one unsuspecting e-mail user to be hit with more than 30,000 "do not spam me" e-mails intended for the defendant.

The FTC filed a lawsuit against NetSource One Inc. in Louisville, Ky., and James Haddaway, operating as WorldRemove, saying they used spam and the Internet to sell a service that allegedly reduced or eliminated spam from consumers' e-mail accounts. But an undercover investigation determined that consumers actually received more spam after signing up for the service.

Haddaway couldn't be reached for comment.

The FTC charged four other spammers with sending illegal chain letters seeking money. Under a settlement reached with the FTC, those defendants have agreed not to participate in any illegal e-mail chain letter schemes in the future.

The FTC also said that 10 agencies have participated in its "Spam Harvest," an initiative designed to determine which actions consumers take online that put them most at risk for receiving spam.

Chris Hoofnagle, legislative counsel for the Washington-based Electronic Privacy Information Center, said that while it's good for the FTC to go after spammers who send fraudulent e-mails, the agency should do more to protect consumers against mainstream spammers.

He called on Congress to pass "opt-in" legislation for spammers, requiring them to get a user's permission before sending out spam e-mails. In addition, the legislation should require spammers to label their e-mails as advertisements.

Thomas Cohn, assistant regional director of the FTC's Northeast region, said that as a law enforcement agency, the FTC doesn't take a position one way or the other against mainstream spam, because it isn't illegal. But the agency does try to educate consumers about ways to protect themselves against unwanted spam, he said.

"It's up to Congress to pass laws [against spam]," he said. "Our charge is to enforce the laws that are already on the books. We want to stamp out deceptive spam."

Cohn said that while the FTC has advocated for new antispam laws in the past, the current administration isn't inclined to do so.

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