The subject today is unsolicited commercial e-mail, better known as "spam" (with apologies to Hormel). Spam is a problem for practically everyone with a computer. It’s annoying, it slows down the e-mail system, and a lot of it is fraudulent.
Today, the FTC is pleased to receive a report on unsolicited commercial e-mail from a group of industry leaders, privacy advocates, and online consumers. In a moment, we’ll be hearing from Deirdre Mulligan of the Center for Democracy and Technology who will briefly describe and summarize this report. I just want to emphasize that the Commission greatly appreciates the hard and thoughtful work that has gone into this report. After we’ve had some time to review its findings and recommendations, we will be in a position to comment.
Thank you, Deirdre. Now we at the FTC also have some news today: we are releasing our "dirty dozen" list of spam scams most likely to show up in consumers’ electronic mailboxes. This "dirty dozen" list is a tip-off to a rip off. Here’s how we came up with our list: Last fall, the FTC set up a special electronic mailbox, " firstname.lastname@example.org ," for consumers to send us spam that they had received. We advertised this mailbox through our website, our Consumer Response Center, and by "word of mouth" on the Internet. We invited consumers to forward their unwanted UCE. As of the end of last week, consumers had forwarded well over 250,000 pieces of spam to email@example.com , and they continue to do so at a rate of between 1,000 and 1,500 spams per day.
What have we done with all of that spam? First, we put all of it into a searchable database so that we could study the spam and identify possible targets for law enforcement actions. To date the Commission has brought five such actions.
In one action, the Commission sued Internet Business Broadcasting, a company that sold opportunities to lease "billboards" or "banners" that would run on their Internet newspaper sites. In spam sent to would-be investors, the defendants claimed that investors in the billboards could sublease advertising space and earn a guaranteed return on their investment. Their spam messages claimed that purchasers could reasonably expect earnings of $240 - $800 per month, a return of 100.8 percent of their investment within the first year, and a full refund if the promised levels were not reached. In fact, the FTC alleged, few purchasers achieved the levels of earnings claimed and the defendants did not provide a full refund. Consumers' investments ranged from $5,000 to $7,500.
In a second enforcement action, the Commission sued the promoters of a pyramid scheme that promised investors would earn up to $18,000 a month and receive an unsecured credit card with a high credit limit. Participants in the pyramid scheme disseminated their promotional materials though bulk e-mail messages, as well as in newsgroup postings and via Web sites. As with all pyramids, the earnings claims were simply insupportable. The defendants entered into a settlement order that requires them to pay nearly $2 million in consumer redress.
Having reviewed the spam in our database, we quickly realized that many spammers who make deceptive claims in their e-mail simply imitate what they see others doing, and do not necessarily know that there are federal and state laws that prohibit deceptive advertising claims in all media, including e-mail. To make certain that these spammers understand what the law requires, and to let them know that the FTC is on the beat, we sent letters to over 1,000 spammers identified through our database. These spammers most frequently sent "chain-letters" by e-mail. Some have expressed appreciation that the FTC took time to warn them that they were treading on legally shaky ground.
The best use we can make of our spam database is to warn consumers about frauds that may be lurking in their e-mail boxes. Our "dirty dozen" list reflects the frequency with which certain kinds of scams arrived in the FTC’s spam mailbox. Let me describe the dirty dozen:
In short, consumers need to be just as cautious about responding to unsolicited pitches that arrive in their e-mail boxes as they are when responding to unsolicited postal mail, telemarketing, or door-to-door solicitations. When you get unsolicited e-mail, feel free to forward it to us at the FTC -- firstname.lastname@example.org . We may be the only people in town who actually want your spam. We will continue to monitor the spam we receive for use in law enforcement and consumer education. Thank you.