Email Spammer Settles FTC Charges: Tricked Consumers With False Information About the Affordable Care Act

An email spammer and his company will pay $350,000 to resolve Federal Trade Commission charges that they sent deceptive emails in advance of the Affordable Care Act (ACA) roll-out, falsely claiming that consumers would be violating the law if they did not immediately click a link to enroll in health insurance.

In January 2014, the FTC filed a complaint against Yair Shalev and Kobeni Inc., alleging that their misrepresentations violated Section 5 of the FTC Act. It also alleged that their spam emails violated the CAN-SPAM Act by failing to provide consumers the opportunity to decline to receive future emails, and to provide a valid physical postal address. According to the complaint, the defendants’ emails led to websites with advertisements for insurance. The websites’ operators paid the defendants when consumers clicked links in the ads. Insurance companies whose ads appeared on the websites did not authorize the email messages.

The settlement order imposes a $350,000 judgment and permanently prohibits the defendants from misrepresenting material facts about any product or service, including that consumers will violate federal law if they do not select health insurance by a certain date, or that the law requires consumers to buy something. The order also bars the defendants from violating the CAN-SPAM Act, including by engaging in the violations that occurred in this action.

The Commission vote authorizing the staff to file the proposed stipulated order was 5-0.  The U.S. District Court for the Southern District of Florida entered the order on August 7, 2014.

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