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Spam and the FTC

By: Adultinternetlaw.com

As every webmaster should know, spam is unsolicited junk mail sent to an individual's email account. Individuals using spam are pursued by many agencies, but the Federal Trade Commission ["FTC"] is the most aggressive government agency in this area and in the adult internet arena in general.

In 1994, the FTC filed its first action against an individual using spam in FTC v. Corzine. It has since filed well over 100 additional actions and is becoming more aggressive all the time. Ironically, the FTC has taken the position that it believes the internet commercial environment should be self-regulated. The massive onset of individuals using spam, however, has changed the view of the FTC. This change in philosophy became cemented in the Geocities case when the FTC identified one company that had sent over 25 million spam messages. As things stand, the FTC estimates that 25 million pieces of spam are sent each day.

To combat the spam problem, the FTC has created an e-mail in which spam can be forwarded, to wit, Uce@ftc.gov. This address is used as a resource to pursue easily identified abusers and large production sources. The FTC currently receives 3,000 to 4,000 forwarded spam e-mails a day. In light of this and other sources of information, the FTC has pursued an aggressive attitude towards those who spam. The adult internet companies have not excluded from this process.On of the more interesting cases involving adult content concerned offshore phone sex services. As is common knowledge in the industry, money is generated in this forum by having people call an international telephone number for which they are usually charged a certain amount for each minute they are connected. As with any adult service, the question the company faced was how to attract traffic? The company came up with an inventive, yet illegal, system.

In FTC v. Benoit, the court put forth the spam based scheme to promote the phone service. The scheme began with the defendant sending spam notifying the consumer of charges supposedly billed to the consumers' credit cards. The charges mentioned were between $200 and $900. Of course, no such charges had occurred and the consumers were provided in the spam mail with a phone number to call if they had any questions about their order. You can see where this is headed. Yes, the numbers were for the area code, 767, which is the code for Dominica, West Indies. Consumers who called to prevent the charges to their credit cards, were instead allegedly connected to an adult "audio text". The following month, the expensive, international calls were paid as part of the consumers' telephone bill. The revenues were split between Benoit and the company setting up the adult service. The defendant tried to hide his tracks by using forged headers in the spam, but these failed and he was rounded up. In light of these and similar tactics, the FTC is now paying much closer attention to spam scams.

The FTC pursues spam producers under the guidelines of the Federal Trade Commissions Act. This Act prohibits unfair methods of competition and unfair or deceptive acts or practices affecting commerce. The FTC can be expected to continue to pursue what it views as deceptive tactics, particularly in the adult internet arena. If using e-mail advertising is part of your marketing technique, make sure you have approval from the recipient to send them messages. Additionally, make sure you create a clear link for the consumer to opt-out of your e-mail database. This is particularly true if you are sending content comprised of adult subjects. No webmaster could possibly want to be on the wrong end of a high-profile FTC action for an unsolicited e-mail full of adult content that has been viewed by a child. By avoiding the use of spam, such a nightmare can be avoided.

The above discussion is intended to be a general commentary on spam,issues. Each situation is different and this article is not intended as legal advice for your specific situation. Further, nothing in this article is intended to create an attorney-client relationship.

J.D. Obenberger - AdultInternetLaw.com                

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