FTC Looks to Stop Deceptive Spam

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

Wednesday, 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 issued 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.

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

Officials at the FTC could not be reached for further comment.

False Promises

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

The FTC stated that 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 agency filed a lawsuit against NetSource One in Louisville, Kentucky, 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.

Settlement Reached

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 ten 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, D.C.-based Electronic Privacy Information Center, said that while it's good for the FTC to go after spammers who send fraudulent e-mail messages, 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-mail messages. In addition, the legislation should require spammers to label their e-mail messages as advertisements.