FTC Sues Six in "Spam" E-Mail Round-Up

The U.S. Federal Trade Commission said Wednesday that it had sued six junk e-mailers who bombarded Internet users with illegal pyramid schemes, fraudulent loans and e-mail filters that actually attracted more "spam."

The announcement came as other state and federal law-enforcement authorities in the Northeastern United States announced actions of their own as part of a concerted effort to cut down on deceptive spamming and other illegal behavior on the Internet.

"All of us are combining our resources to combat deceptive spam and Internet scams," said Barbara Anthony, regional director for the FTC at a press conference in Boston.

The FTC coordinated similar efforts in the Midwest and Pacific Northwest earlier this year.

While spam is widely regarded as a nuisance for Internet users, it is not illegal under U.S. law.

All those facing FTC lawsuits are charged with violating existing laws against deceptive and unfair trade practices.

One defendant used the logos of well-known financial institutions like Prudential and Fannie Mae in order to collect personal information like income and home values from respondents, the FTC said.

The defendant, whose name was not released, also used false return addresses so those trying to contact him would not receive "no such recipient" and "do not contact me" messages, the FTC said.

As a result, 30,000 such responses were sent to an innocent Internet user, the FTC said.

Another defendant sent spam messages for a service that promised to eliminate spam. In fact, the product sold by NetSource One and its principal, James R. Haddaway, actually attracted more spam, the FTC said.

Four others were charged with sending illegal chain letters asking for money. The defendants agreed to stop the practice or face fines, the FTC said.

Another 100 pyramid-scheme operators received warning letters from law enforcement authorities.

The FTC also said that investigators had scattered special e-mail addresses around the Internet to see if spammers would pick them up.

While spam has been a nuisance for Internet users for years, complaints have risen dramatically as the volume of unwanted commercial pitches has exploded. Anti-spam firm Brightmail estimates that spam now makes up 36 percent of all e-mail traffic, up from 8 percent a year ago.

E-mail addresses left in news groups and on Web pages were almost certain to receive spam, they found, while those left on message boards and posted in e-mail directories were somewhat less likely to receive unwanted commercial pitches.

Addresses left in chat rooms were certain to receive spam, they found. In one instance, an e-mail address posted in a chat room started to receive spam eight minutes after it was posted.

Twenty-six states have anti-spam laws of one sort or another, but efforts to pass a national law in Congress have stumbled over opposition from commercial marketers.

The Direct Marketing Association, which represents many commercial marketers, switched its position last month and said it would ask Congress to pass anti-spam legislation so legitimate marketing efforts would not be drowned out.

Internet users can forward spam for FTC investigation to uce@ftc.gov. The consumer-protection agency has amassed a database of 20 million junk e-mails.