Internet Marketers Settle FTC Charges

The Federal Trade Commission has charged two Internet marketers with violating the CAN-SPAM Act by failing to offer an opt-out method or honor consumers’ right to opt out of receiving future marketing mailings within 10 days of making the request. One marketer also failed to include a valid physical postal address, which also is required by the CAN-SPAM Act. Settlements with the marketers prohibit future violations of the Act and provide for civil penalties totaling more than $32,000.

The CAN-SPAM Act bans false or misleading header information, prohibits deceptive subject lines, requires that commercial e-mailers give recipients an opt-out method, requires that they honor requests to opt-out within 10 business days, requires that commercial e-mail be identified as an advertisement, and requires the sender to include a valid physical postal address.

The FTC charged that Kodak Imaging Network, formerly Ofoto, Inc., sent a commercial e-mail message to more than two million recipients that failed to contain an opt-out mechanism, failed to disclose in the e-mail message that consumers have the right to opt-out of receiving further mailings, and failed to include a valid physical postal address, as required by law.

The stipulated final judgment with Kodak Imaging Network prohibits future violations of the CAN-SPAM Act and imposes $26,331 in civil penalties, which represents a one hundred percent disgorgement of the gross proceeds from the offending e-mail campaign. The settlement also contains record-keeping and reporting provisions to allow the agency to monitor compliance with its order.

The FTC also charged that ICE.com sent more that 6,000 e-mail messages to consumers who had previously requested not to receive future commercial e-mail messages from the company. The stipulated final judgment with ICE.com requires the company to pay $6,500 in civil penalties. The final order also prohibits future violations of the CAN-SPAM Act and includes record-keeping provisions.

The Commission votes to refer each of the complaints and proposed consent decrees to the Department of Justice for filing were 5-0. The proposed consent judgments were filed on May 10 and May 11 by the Department of Justice at the request of the FTC. They are subject to court approval.

NOTE: Stipulated judgments are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the complaints and stipulated final orders 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 in English or Spanish (bilingual counselors are available to take complaints), 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 at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 042-3187)
(Civil Action No. 06-3117)

(FTC File No. 052-3087)
(Civil Action No. 8:06-CV-580 (GLS/RFT), ND NY)