Spam Company Settles FTC Suit for $900K
An Internet marketing company that offered free movie tickets in exchange for friends' e-mail addresses agreed to pay a $900,000 fine to settle charges it violated federal anti-spam laws, authorities said Friday.
Jumpstart Technologies LLC of San Francisco was accused by the Federal Trade Commission of disguising commercial e-mail as personal messages and misleading consumers about the terms of its FreeFlixTix promotion, FTC staff attorney Lisa Rosenthal said.
"This was a pretty cut and dry case of deception," Rosenthal said. "The law enables consumers to block commercial e-mails if they want to, and this was subverting consumers' ability to do that because it looked like it was coming from friends."
A call to Jumpstart's defense lawyer was not immediately returned Friday.
The civil settlement was filed March 22 in federal court in San Francisco and prohibits the company from further violations of anti-spam laws. It does not include an admission of guilt.
The complaint alleges that Jumpstart, which operates direct marketing campaigns for advertising partners and collects marketing information for sale to third parties, sent mass e-mail promising tickets in exchange for the e-mail addresses of at least five friends.
The company then sent multiple e-mail to those friends with deceptive subject lines and headers including personal greetings intended to circumvent spam filters, according to the complaint.
Some people who wanted to join the promotion were asked to submit credit card information to an advertising partner, and others had to pay a late charge to cancel the offer, the complaint alleges.
The company was accused of violating a 2003 law that set strict guidelines for businesses that send commercial e-mail and set penalties for spammers.
In the complaint, the FTC accused Jumpstart of sending commercial e-mail with false or misleading "from" lines, failing to clearly identify its messages as advertising, and failing to clearly inform recipients that they could opt out of receiving more e-mail.