The Federal Trade Commission and the U. S. Postal Inspection Service have put more than 1,000 junk e-mailers on notice that the agencies are monitoring unsolicited e-mail for fraudulent schemes and are keeping track of the schemers.
The FTC maintains an e-mailbox -- email@example.com -- where consumers can forward unsolicited commercial e-mail that they believe may be fraudulent or deceptive. The electronic address receives approximately 500 e-mails a day. Consumers also forward large volumes of unsolicited commercial e-mail to the U.S. Postal Service. The agencies reviewed these collections for e-mail that appeared to be deceptive or fraudulent, in violation of the FTC Act or the Postal Lottery Statute. Letters were sent to the e-mailers warning them about participating in schemes that may violate the law. Letters to participants in chain-letter schemes came jointly from the FTC and the U. S. Postal Inspection Service.
"Fraud promoters should think twice before plying their trade on the Internet," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "First, the FTC is on the Internet beat and will follow up with spam artists who don't clean up their correspondence. Second, many consumers are already on to them -- they know better than to believe promises from strangers."
Bernstein said the largest category of junk e-mail targeted by the FTC was chain letters. "Pyramid schemes and chain letters make money only for the first few on the list. All the others lose their money. That's why pyramids and chain letters deceive consumers and are illegal under state and federal laws," she said. The chain letter schemes urge e-mail recipients to send a small amount of money to a list of several people, remove one name, add their own and forward the e-mail in bulk to others. Theoretically, the participants will start to receive money as other, "downstream" recipients receive the e-mail and participate. Economists have estimated that about 95 percent of pyramid participants lose their money.
Some chain letters masquerade as legitimate businesses, in which participants receive "reports" or other worthless items in exchange for their money. These schemes are still illegal, and almost all participants lose money.
"Don't be fooled by claims the U.S. Postal Service has given approval for these schemes," warns Larry Maxwell, Manager of the Fraud, Prohibited Mailings and Asset Forfeiture Group of the U.S. Postal Inspection Service. "Many letters provide the correct legal citation, Title 18, Section 1302, which negates rather than supports the legality of the scheme. We as an agency never approve a solicitation and recommend consulting an attorney if you contemplate such mailings," he added.
Other categories of e-mail that received the warning message were business opportunity offers that appeared to be fraudulent, "cash grant" schemes, deceptive diet and medical solicitations, credit repair scams and suspect "guaranteed credit card" solicitations. The agencies have kept copies of the warning letters for possible use in future law enforcement actions if the violations do not cease.
A new FTC publication about unsolicited commercial e-mail, "Trouble @ the In-Box," offers examples of some common scams and provides tips on how to avoid them. The FTC has a variety of other consumer education publications -- including publications on advance fee loans, credit repair, virtual health "treatments," pyramid schemes and investment scams -- available on its web site at http://www.ftc.gov (no period). Consumer publications also are available at http://www.consumer.gov -- a cooperative effort of the FTC, Securities and Exchange Commission, Food and Drug Administration, Consumer Product Safety Commission and National Highway Transportation Safety Administration.
Copies of all FTC consumer publications also are available from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-3128; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.