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Spam Buster Busted

November 13, 2002
A company that claimed to remove spam from consumer's email is accused of doing the oppose. The Federal Trade Commission charges that NetSource One, operating as WorldRemove, used deceptive spam, including unauthorized use of logos of well-known financial institutions including Radian Bank, Prudential, and Fannie Mae, to induce victims to disclose sensitive financial information such as income, mortgage balances, and home values.

The spammers purported to offer consumers competitive financing and refinancing loans. The defendants also allegedly forged e-mail headers - a technique known as "spoofing," - so that any undeliverable messages went to e-mail addresses unaffiliated with the defendants. One unaffiliated third party was swamped with more than 30,000 bounce-back and angry "do not spam me" e-mails intended for the defendants.

The FTC also alleged that the defendants deceptively claimed that consumers who received their solicitations could opt out of future offers. The FTC charged the defendants with unfair and deceptive practices, violations of the FTC Act, and with "pretexting,"- posing as an entity it was not in order to get sensitive financial information - a violation of the Gramm-Leach-Bliley Act.

Laptops

Brian Silverman, doing business as BES Systems, Electro Depot, Dallas Tech Surplus, and New York Tech Surplus offered laptop computers for sale via Internet auction houses, including eBay. The FTC alleges that Silverman accepted only cash, checks, or money orders for payment from winning bidders. In many instances he failed to provide the computers or provide refunds to his victims, the agency alleged. The FTC charged him with violating the FTC Act and the Mail or Telephone Order Merchandise Rule.

Chain E-Mail

Four individuals who used spam to promote chain e-mail schemes have settled FTC charges that their schemes were illegal. In February 2002, the FTC sent warning letters to more than 2,000 spammers whose chain-letter spam also contained deceptive claims that the FTC's Director of Marketing Practices could vouch for the illegal pyramid's legality. The agency used its spam database, which contains more than 20 million unsolicited commercial e-mails, to identify individuals who had received warnings and who continued to send the messages. Undercover investigators sent money to Jessica Drees, Heidi Freitas, Rosaline Leahy, and Nancy Merrill, who accepted the payments. Settlements will bar their participation in illegal chain letter schemes in the future.

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