Proliferation of Deceptive E-Mail Poses Threat to Consumer Confidence Agency Says
The Federal Trade Commission today told a Senate Subcommittee that it favors legislation to limit junk e-mail by allowing consumers to refuse to receive it and imposing penalties on those who ignore the consumers' choice. Testifying before the Communications Subcommittee of the Senate Committee on Commerce, Science and Transportation, Eileen Harrington of the FTC's Bureau of Consumer Protection told the panel the FTC is concerned about the widespread use of junk e-mail to disseminate false and misleading claims about products and services offered for sale on the Internet. "Giving consumers the ability to choose the information they receive over the Internet. . . .seems likely to create more confidence in its content and in the sender," the testimony says.
The FTC says that as the federal government's principal consumer protection agency, it closely monitors Internet issues including such issues as the impact of junk e-mail on e-commerce. It says that a 1998 report to the FTC produced under the leadership of the Center for Democracy and Technology recommended that marketers give consumers a choice to "opt in" or "opt out" of receiving unsolicited commercial e-mail (UCE) and urged law enforcement to continue to attack fraudulent UCE solicitations, including those with deceptive "header" information. Since 1998, the FTC has invited consumers and Internet Service Providers to forward UCE to an e-mail box at firstname.lastname@example.org. "Over 8.3 million pieces of UCE have been forwarded to the Commission since January 1998, and the UCE mailbox receives an average of 10,000 new pieces of UCE every day, seven days a week," the testimony says. "The Commission has responded to fraudulent UCE with a vigorous law enforcement program. To date, about 30 of the Commission's Internet cases have targeted scams in which spam was an essential, integral element." In addition to its law enforcement and monitoring activities, the testimony notes that the FTC has a comprehensive consumer and business education effort. "The Commission has published 9 consumer publications related to UCE, available in both paper format and downloadable from the FTC's Web site. More than 1.6 million of these documents have been distributed to consumers."
The FTC testified that it supports the goals of S. 630, a bill introduced by Chairman Conrad Burns designed ". . . to help control the costs and other negative effects that UCE can impose on Internet access service providers and other businesses and consumers that use the Internet, and to support consumer choice in the matter of whether to receive UCE." The testimony notes that S. 630 addresses both the issue of deceptive or fraudulent UCE, and the infrastructure problems associated with the volume of UCE. "Both of these problems together pose a threat to consumers' confidence in the Internet as a medium for personal electronic commerce." The testimony points out that S. 630 would require:
- disclosure that UCE is an advertisement or solicitation;
- a notice of opportunity to decline future UCE from the sender;
- a functioning return e-mail address; and
- a valid postal address of the sender.
S. 630 would also make it unlawful to send subsequent e-mail to a consumer who had requested that they receive no further e-mail and to send e-mail with false header or misleading subject lines.
S. 630 includes a multi-faceted enforcement scheme and would allow other federal agencies, Internet Service Providers and Attorneys General enforcement authority to obtain injunctions against violations and to recover damages.
The testimony says S. 630's prohibition on false header and subject information would benefit both consumers and legitimate businesses. ". . . [T]hese provisions could make the use of commercial e-mail a more effective marketing tool, because consumers likely would be more willing to trust the contents of a piece of UCE if they know the source of the e-mail." It notes that the benefits of the provisions that would allow consumers to "opt out" of receiving future UCE, ". . . would likely outweigh the costs to the senders." Finally, the testimony says, "The enforcement scheme laid out by S. 630 likely would work well. It is modeled on similar schemes Congress established for enforcement for the Commission's 900-Number Rule and the Telemarketing Sales Rule in the statutes that mandated promulgation of those Rules. . . .This type of dual federal-state enforcement scheme has proved extremely successful in the past, particularly in challenging deceptive and abusive telemarketing practices, and the Commission would expect it to work equally well in this context."
The Commission vote to approve the testimony was 5-0.
Copies of the testimony 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 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.
Farrell Office of Public Affairs
Allen W. Hile
Bureau of Consumer Protection
(FTC File No. P01 4101)