FTC Shuts Down Deceptive Spam Operation

October 5, 2004

“Business Opportunity” Turns Out To Be Illegal Scam

An operation that used illegal spam to promote a bogus get-rich-quick scheme has been shut down by a U.S. District Court at the request of the Federal Trade Commission. The FTC alleged the spammers violated federal laws by using deceptive header information and subject lines in their spam solicitations, making bogus earnings and refund claims, and withdrawing funds from consumers’ checking accounts without authorization. The FTC will seek to shut down the operation permanently and will seek redress for consumers.

According to the FTC, the operation spammed consumers with e-mail that claimed that they could make substantial income by signing up for the spammers’ work-at-home business opportunity. The e-mail contained claims like, “Do you think you would be interested in becoming a permanent home-based worker for our company and earning an extra Guaranteed $30k to $100,000 A Year?” In their e-mail, the defendants represented that consumers could obtain a “home mailing kit” for a “shipping and handling” fee of $24.77; that the defendants would pay consumers $4 for each envelope they stuffed and mailed; and that the offer was backed by a 30-day, money back “NO QUESTIONS ASKED” guarantee. According to documents filed with the court, however, the “kit” received by most consumers was a two-page letter and a CD-ROM showing consumers how to perpetuate the defendants’ scam. Consumers who tried to get the defendants to honor the “30-day, money-back guarantee,” were ignored, falsely told that the returned material was damaged, or told they failed to act within the 30-day trial period. One consumer was told he would be reported to the police for harassment if he contacted the “call center” again.

The defendants claimed that in addition to the initial “shipping and handling” fee of $24.77, consumers would be charged a $24.95 “registration fee” only after their 30-day trial period expired. Consumers who signed up for the home mailing program, however, often found their bank accounts debited for the entire $49.72 amount immediately. In other instances, the defendants withdrew this amount twice. Consumers who complained about these unauthorized withdrawals rarely succeeded in obtaining refunds.

The FTC alleged that the defendants’ spam contained altered or “spoofed” header information falsely indicating that the message had been transmitted “from” either the recipient’s own e-mail account or the account of an unrelated third-party. Other messages contained “reply-to” fields with e-mail addresses registered to unrelated third parties, or with e-mail addresses that the defendants got using phony names and addresses. The FTC also alleged that the defendants’ e-mail messages contained deceptive subject lines to induce recipients to open them.

The FTC alleges that these practices violate the FTC Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, and the Telemarketing Sales Rule. The FTC has asked the court to bar the illegal practices permanently and to order redress for consumers.

Press Release

Complaint
Ex Parte Temporary Restraining Order