An Internet marketer will pay a US$900,000 fine, the largest ever on spam-related charges, in a consent decree announced last Thursday by the U.S. Federal Trade Commission (FTC).
Jumpstart Technologies, based in San Francisco, is permanently prohibited from unlawful practices related to the U.S. CAN-SPAM Act as part of the decree, entered in U.S. District Court for the Northern District of California.
The company, operating as an Internet marketer since July 2002, provided direct marketing opportunities for advertising partners and collected marketing data to sell to third parties, FTC said. Jumpstart, in its FreeFlixTix promotion, violated the antispam law by disguising its commercial e-mail messages as personal messages and by misleading consumers about the terms and conditions of the promotion, FTC said.
Jumpstart offered free movie tickets to consumers in exchange for the names and e-mail addresses of five or more of their friends, FTC said. Jumpstart then sent them commercial e-mails with the original consumer's e-mail address in the "from" line and a seemingly personal subject line, such as, "Hey," "Happy Valentine's Day," "Happy New Year," or "Movie time. Let's go."
Jumpstart also made it look as if the consumer had written the message text. In this way, Jumpstart's commercial e-mails circumvented some spam filters and were opened by consumers who thought they contained personal correspondence, FTC said.
People received six or more e-mails urging them to join FreeFlixTix, some containing advertisements for other products or services offered by Jumpstart or its partners. In many instances, the subject lines of the e-mail messages falsely indicated that their friend was sending them free tickets, and many people who tried to opt out of the promotion kept getting similar e-mails for weeks afterward, FTC said.
The FTC's complaint also alleges that the company engaged in deceptive advertising by misleading consumers about the terms and conditions of the FreeFlixTix promotion. To qualify for a "free" movie ticket, some consumers had to submit their credit card information to one of Jumpstart's advertising partners and sign up for one of their promotions. Some of Jumpstart's advertising partners required that consumers pay for the promotion, while others made so-called "free" offers consumers had to cancel at a later date to avoid a charge.
Jumpstart violated provisions of the CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act by sending commercial e-mail messages with false or misleading subject and "from" lines, and by sending e-mail messages more than 10 business days after receiving an opt-out request from consumers, FTC said. The company also did not clearly identify messages as advertising or solicitations, and did not clearly inform recipients that they could opt out of receiving more e-mail messages.