Nationwide Coordinated Law Enforcement Actions Taken as Part of "Project Mailbox IV"
The Federal Trade Commission today announced that as part of "Project Mailbox IV," the FTC and its federal and state law enforcement partners brought hundreds of actions in the past year against scam artists who used the mail, unsolicited faxes and e-mail "spam" to bilk millions of dollars out of consumers and businesses. For the fourth straight year, the FTC, U.S. Postal Inspection Service ("USPIS"), Securities and Exchange Commission ("SEC") and National Association of Attorneys General ("NAAG") partnered to stop a wide variety of deceptive offers sent to consumers via direct mail, by e-mail or fax. The results of their year-long effort are summarized in the just-released "Project Mailbox IV" report, which covers the time period from October 1, 1999 to September 30, 2000.
For the first time, this year's report tallies the Internet-related frauds within the more than 300 law enforcement actions. More than one-third of the federal cases and just over half the state actions were taken against companies that used the mail, or sent spam and unsolicited faxes and who also had a Web site or advertised on the Internet.
Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, which coordinated Project Mailbox, praised the federal-state activities that have stopped so many scams and reaped so many benefits for consumers. "We are delighted to work, for the fourth year in a row, with the states, the District of Columbia and our partner agencies to stop deceptive offers sent by the mail, by spam, and by unsolicited fax," she said. "Con artists must understand that the Project Mailbox coalition is here to stay. We will continue to coordinate our efforts on all fronts and share information with consumers and businesses about deceptive and bogus offers."
This year, offers using sweepstakes and prize promotions led the list of the Project's law enforcement actions. Project Mailbox partners brought more than 180 cases against operators who used deceptive sweepstakes and prize promotions. As a result, millions of dollars were returned to consumers who were taken in by such offers. The second largest category focused on deceptive travel and vacation scams, with state and federal partners bringing more than 50 law enforcement actions against major players in the vacation certificate and timeshare industry.
"We have case after case of elderly consumers on fixed incomes buying thousands of dollars worth of magazine subscriptions and trinkets because they believed it would increase their chances of hitting the jackpot in a sweepstakes," said Ohio Attorney General Betty D. Montgomery, chairman of the NAAG Consumer Protection Committee. "While we've been able to recover millions of dollars taken from consumers over the past year, we will remain vigilant, watching our mail for the next scheme."
The SEC brought cases involving investment scams conducted through the mail, spam or fax. Many of these scams attempted to manipulate stock prices or to sell unregistered securities.
The federal agencies and states also were active in disseminating consumer education to consumers about how to identify and avoid fraudulent offers. At the same time, to caution businesses, the Yellow Pages Publishers Association ("YPPA") and the FTC joined forces in an outreach program to millions of trade association members by arranging for them to carry the Project Mailbox message on their Web sites, with a hyperlink to an FTC Web site featuring valuable information alerting businesses about scams targeted at them.
"We want con artists who think they can get away with cheating consumers and businesses by way of the mail, e-mail or fax machine to know that the FTC has built an effective consumer protection coalition to thwart their disreputable tactics," Bernstein concluded. "This alliance wants fraud to be the farthest thing from the minds of consumers as they look over postcards or envelopes delivered to their mailboxes or retrieve daily electronic mail."
NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendants of a law violation. The stipulated order is subject to court approval and has the force of law when signed by the judge.
Copies of the "Project Mailbox IV" Report on Law Enforcement Actions and Consumer Education Initiatives are available from the FTC's Web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the online complaint form. The FTC enters Internet, telemarketing and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies worldwide.
Mitchell J. Katz
Office of Public Affairs
Bureau of Consumer Protection
Bureau of Consumer Protection