No "Silver Bullet" to Limit Spam, FTC Tells Congress

The Federal Trade Commission today told Congress that there is no "silver bullet" to solve the problems of increasing volume, increasing costs, and increasing international effects of spam. In testimony before the Senate Committee on Commerce, Science and Transportation, Commissioners Mozelle W. Thompson and Orson Swindle told the panel "Solving the problem of bulk unsolicited commercial e-mail will likely necessitate an integrated effort involving a variety of technological, legal, and consumer action, rather than one single solution."

The Commission testimony outlines initiatives the FTC has taken to combat spam, including law enforcement actions targeting deceptive spam, consumer education efforts, studies and analyses of spam, and a recent, three-day "spam forum," to address the cost and technology burden imposed by the increasing amount of spam.

The testimony states that the problems with spam include the fact that "deception and fraud appear to characterize the vast majority of spam," and the volume of spam, which is multiplying at a rapid rate, is presenting infrastructure problems that may lead to "significant disruptions and inefficiencies in Internet services and may constitute a significant problem for consumers and businesses using the Internet."

The FTC has brought more than 53 law enforcement actions against spammers, including spammers who used deceptive content, those who used deceptive "remove me" options, spammers who "spoofed" - or used deceptive "from" addresses, and those who used deceptive subject lines.

To compliment its law enforcement actions, the Commission has studied various aspects of spam and researched the problems it poses, the testimony states. An effort by the FTC and international partners to test whether spammers were honoring "remove me," or "unsubscribe," options found that 63 percent of the removal links did not function.

In a "spam harvest," the Commission examined which online activities place consumers at risk for receiving spam. "The examination discovered that one hundred percent of the e-mail posted in chat rooms received spam; one received spam only eight minutes after the address was posted," the testimony notes. "Eighty-six percent of the e-mail addresses posted at newsgroups and Web pages received spam, as did 50 percent of addresses at free personal Web page services, 27 percent from message board postings, and 9 percent of e-mail service directories."

An analysis of false claims in spam by the FTC staff found that nearly 66 percent of the spam appeared to contain deception, either in the content, in the "subject" line, or in the "from" line. The staff found that 20 percent of the spam they reviewed contained offers for investment or business opportunities; 18 percent offered adult-oriented products or services; 17 percent involved finance, including credit cards, mortgages, refinancing and insurance. "An astonishing 90 percent of the investment/business opportunity category of spam contained indicia of false claims," the testimony says. "This Spam Study confirms the Commission's earlier belief that fraud operators, who are often among the first to exploit any technological innovation, have seized on the Internet's capacity to reach millions of consumers quickly and at a low cost through spam. Not only are fraud operators able to reach millions of individuals with one message, but they also can misuse technology to conceal their identity. The Commission believes the proliferation of fraudulent or deceptive spam on the Internet poses a threat to consumer confidence in online commerce and, therefore, views the problem of deception as a significant issue in the debate over spam."

On April 30, the Commission testimony notes, the FTC convened a "Spam Forum" to help inform the public policy debate and to explore solutions to the spam problem. Eighty-seven panelists representing as many sides of the issue as possible participated in twelve panel discussions over a three day period. Several themes emerged. First, the volume of spam is increasing sharply and the rate of increase is accelerating. "For example, one ISP reported that in 2002 alone it experienced a 150 percent increase in spam traffic. Second, spam imposes real costs." ISPs must provide servers and bandwidth to cope with the increasing flow of spam, and they pass that cost on to consumers. "Third, spam is an international problem. According to our international panelists, most of the spam received in their countries is in English and advertises American products of companies. Most panelists agreed that any solution to stopping spam will have to involve an international effort," the testimony states.

"E-mail provides enormous benefits to consumers and businesses as a communication tool. The increasing volume of spam to ISPs, to businesses, and to consumers, coupled with the use of spam as a means to perpetrate fraud and deception put these benefits at serious risk," the testimony concludes.

The Commission vote to approve the testimony was 5-0.

Copies of the testimony 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.

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