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Deceptive Spammers Settle FTC Charges
October 23, 2002
Operators who used spam, deceptive earnings claims, and fictitious testimonials to sell spam e-mail lists as business opportunities have agreed to settle Federal Trade Commission charges that their operations violated federal laws. The settlements will bar the defendants from making false, misleading, or deceptive claims about their e-mail lists, software, service, marketing program, or any other business opportunity.
The FTC alleged that Richard Jon Scott, doing business as Cyber Data, and Sonya Lockery, doing business as Internet Specialists, sent spam to consumers claiming that by purchasing their bulk e-mail lists, consumers could make easy money selling products and services on the Internet. Internet Specialists also promoted the spam list on a Web site. Cyber Data's e-mail claimed that purchasers reasonably could expect to earn "over $10,000,000" by selling a $5 product via bulk e-mail. Internet Specialists made similar earnings claims, and its Web site and e-mail contained earnings claims that appeared to be endorsements from previous purchasers.
The FTC charged that both Scott and Lockery made false earnings claims and falsely characterized the quality of their bulk e-mail lists. Cyber Data claimed that its e-mail address lists contained "no duplications," and included "almost every person on the Internet today." According to the FTC, Internet Specialists falsely claimed that its 11 million e-mail address list consisted of consumers who were "highly responsive" because they had "either requested to receive e-mail advertisements or have responded to our ads." It also claimed its lists contained no duplicates.
The settlements permanently will bar the defendants from making any false, misleading, or deceptive claims about potential earnings from any bulk e-mail list, software, service, or marketing program, or any other business opportunity. The settlement with Cyber Data bars it from claiming that its e-mail lists contain no duplicates and includes almost everyone on the Internet today. The settlement with Internet Specialists also bars the "no duplicate" claim and bars misrepresentations that the lists include addresses of individuals interested in receiving bulk e-mail ads. Based on financial documents that the defendants provided, the order requires Cyber Data to pay $20,000 in consumer redress and suspends payment by Internet Specialists. Should the court find that the financial statements are materially inaccurate, the order requires Cyber Data and Internet Specialists to pay the total amount of their profits from the schemes.
The Commission vote to accept the stipulated final judgments and orders was 5-0.
The settlement with Scott and Cyber Data was filed in U.S. District Court for the Eastern District of California, Sacramento Division. The settlement with Lockery and Internet Specialists was filed in U.S. District Court for the District of Connecticut.
FTC v. Sonya Lockery, individually, and d/b/a Internet Specialist (Dist. of Conn.); Stipulated Judgment and Order for Permanent Injunction [PDF 657K]
FTC v. Richard Jon Scott, individually, and d/b/a Cyber Data (D.C. E.D. Calif.); Stipulated Judgment and Order for Permanent Injunction [PDF 743K
The above article was reprinted from an announcement on the Federal Trade Commission web site dated October 23, 2002. Check the FTC web site for any changes to the article.
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