Largest U.S. Fine Ever Levied for Spam Violations

WASHINGTON, D.C. -- An Internet marketer will pay a $900,000 fine, the largest ever on spam-related charges, in a consent decree announced today by the U.S. Federal Trade Commission.

Jumpstart Technologies, based in San Francisco, is permanently prohibited from unlawful practices related to the U.S. CAN-SPAM Act as part of the decree, entered in U.S. District Court for the Northern District of California.

The company, operating as an Internet marketer since July 2002, provided direct marketing opportunities for advertising partners and collected marketing data to sell to third parties, the FTC said. Jumpstart, in its FreeFlixTix promotion, violated the antispam law by disguising its commercial e-mail messages as personal messages and by misleading consumers about the terms and conditions of the promotion, the FTC said.

Jumpstart offered free movie tickets to consumers in exchange for the names and e-mail addresses of five or more of their friends, the FTC said. Jumpstart then sent the friends commercial e-mail with the original consumer's e-mail address in the From line and a seemingly personal subject line such as "Hey," "Happy Valentine's Day," "Happy New Year," or "Movie time. Let's go."

Jumpstart also made it look as if the original consumer had written the message text. In this way, Jumpstart's commercial e-mail messages circumvented some spam filters and were opened by consumers who thought they contained personal correspondence, the FTC said.

People received six or more e-mail messages urging them to join FreeFlixTix, some containing advertisements for other products or services offered by Jumpstart or its partners. In many instances, the subject lines of the e-mail messages falsely indicated that their friend was sending them free tickets, and many people who tried to opt out of the promotion kept getting similar messages for weeks afterward, the FTC said.

Deceptive Advertising

The FTC's complaint also alleged that the company engaged in deceptive advertising by misleading consumers about the terms and conditions of the FreeFlixTix promotion. To qualify for a "free" movie ticket, some consumers had to submit their credit card information to one of Jumpstart's advertising partners and sign up for one of their promotions. Some of Jumpstart's advertising partners required that consumers pay for the promotion, while others made "free" offers that consumers had to cancel at a later date to avoid a charge.

Jumpstart violated provisions of the CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act by sending commercial e-mail messages with false or misleading subject and From lines, and by continuing to sending e-mail messages more than 10 business days after receiving an opt-out request from consumers, the FTC said. The company also did not clearly identify messages as advertising or solicitations, and did not clearly inform recipients that they could opt out of receiving more e-mail messages.

Nigerian E-Mail Scheme Indictments

In more good news for the average e-mail user, four people have been indicted and could face 30 years in prison for a variation on a widespread scam in which e-mail senders claim they're trying to transfer money out of Nigeria, the U.S. Department of Justice announced Thursday.

A grand jury in New York City yesterday returned a 10-count indictment against three of the defendants and an 11-count indictment against the fourth. Alleged victims of the four individuals lost more than $1.2 million, the DOJ said.

The defendants allegedly sent spam e-mail messages to thousands of potential victims, and they falsely claimed to have control of millions of dollars located in a foreign country that belongs to an individual with a terminal illness, according to the DOJ.

Three of the defendants were arrested in Amsterdam by Dutch authorities on February 21, based on a U.S. criminal complaint. They are being held by the Dutch authorities pending extradition to the United States, the DOJ said. The fourth defendant, a Nigerian citizen, is a fugitive.

Delete It!

"Global fraudsters need to know that we are determined to find and prosecute them," U.S. Attorney Roslynn Mauskopf of the Eastern District of New York said in a statement. "Potential victims need to know that any e-mail offering millions of dollars that requires that they send money to receive this windfall is a scheme. Delete it."

The four are Nnamdi Chizuba Anisiobi, also known as Yellowman, Abdul Rahman, Helmut Schkinger, Nancy White, and other aliases; Anthony Friday Ehis, also known as John J. Smith, Toni N. Amokwu and Mr. T; Kesandu Egwuonwu, also known as KeKe, Joey Martin Maxwell, and David Mark; and an unnamed defendant known as Eric Williams, Lee, Chucks, and Nago.

The four are charged with one count of conspiracy, eight counts of wire fraud, and one count of mail fraud. Anisiobi is also charged with one count of bank fraud.

The maximum penalty for mail and wire fraud is 20 years in prison, and the maximum sentence for bank fraud is 30 years in prison. The conspiracy charge carries a maximum penalty of 5 years in prison.

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