Spammers Settle FTC Charges

Spammers who collected consumers' personal identifying information, including credit card information, by telling them they had to supply the data or lose access to the Internet have agreed to settle Federal Trade Commission charges that their scheme violated the law. A preliminary order in the case required the defendants to destroy the collected information; this final settlement resolves the remaining issues involved, permanently barring the defendants from misrepresentations in the advertising, marketing, promotion, distribution or sale of any products or services via the Internet, and barring use of personal information collected as a result of misrepresentations.

The Federal Trade Commission charged that in mid-October 1999, Robert Stout, doing business as Global Internet Federal Registry; Get Our From Under.com, Inc,; and Donald J. Lytle, an officer and director of Get Out From Under.com, sent unsolicited commercial e-mail (spam) to Internet news groups notifying members that because of the Children's Online Privacy Protection Act, consumers were required to certify their age to maintain access to the Internet. The messages directed consumers to defendants' Web sites. The sites advised consumers that, "all Internet users are required to register here for Internet licensing," and provided an application form that collected information ranging from consumers' names and addresses to credit card numbers and expiration dates. In December1999 the FTC filed a complaint in the U.S. District Court for the District of New Jersey, charging that the defendants' representations were false and deceptive. Shortly thereafter, the FTC and the defendants agreed to a preliminary order that required destruction of all consumer information collected by defendants as a result of the representations alleged in the complaint. The Stipulated Judgment and Order for Permanent Injunction announced today resolves that court case.

The final order bars the defendants, in connection with the advertising, marketing, promotion, distribution, offering for sale or sale via the Internet of any product or service, from misrepresenting:

any material fact;

that consumers must register in order to maintain access to newsgroups or the Internet;

that consumers must provide personal information to maintain access to newsgroups or the Internet;

that they represent an organization recognized by experts or professionals in the field; or

that they are associated or affiliated with any federal, state or local government organization.

In addition, the settlement bars the defendants from collecting, using, selling or transmitting consumers' personal identifying information or credit card information obtained as a result of misleading representations. The settlement also contains record keeping provisions to allow the FTC to monitor compliance.

The Commission vote to approve the Stipulated Final Judgment and Order was 5-0.

NOTE:  A Stipulated Final Judgment and Order is for settlement purposes only and does not constitute an admission of a law violation.

Copies of the Stipulated Final Judgment and Order 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, 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 hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X000 122)