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US to Crack Down on E-Mail Fraud - 2002-02-13

The U.S. government has announced a crackdown against perpetrators of e-mail fraud. The Federal Trade Commission says it is launching the initiative in response to complaints from consumers who have forwarded more than eight million suspicious e-mails to government watchdogs.

The Federal Trade Commission says the initiative targets people who run so-called illegal "pyramid" schemes. These encourage thousands of people to send mass, unsolicited e-mails, with empty promises of easy money, to others.

FTC Chairman Timothy Muris spoke to reporters at the commission's Internet Laboratory in Washington. He said that as part of the crackdown, the commission will warn 2,000 individuals involved in one particular scheme to stop their activities, or face federal lawsuits. "It promised participants to make $46,000 in as little as three months, simply by sending five dollars to each of four or five people on the list," said Mr. Muris. "It claimed to be perfectly legal."

Mr. Muris said the scheme - in which the recipients were encouraged to create and send their own chain letter - is illegal. He said there was simply no mathematical chance that those taking part would ever collect the promised sum - in fact the majority of those participating in the chain letter would lose money. He said the commission has now reached a legal settlement with seven individuals who continued running the scheme despite a warning from the government 18 months ago. "The settlements today involve individuals who got the warning but chose to ignore it," he says. "Plain and simple, they continued the chain of deceptive spam."

Mr. Muris said that under the settlement, the individuals must stop their activities and return any money they received from others.

The FTC Chairman also acknowledged that consumers receive thousands of other unsolicited e-mails, which are not illegal. Eileen Harrington, a top FTC official said there is very little the government can do to combat intrusive mass e-mailing, even when it is legal. "There are oftentimes, "remove me" lines on spam. Now this is a bit of a tricky wicket, what we have discovered is that many legitimate marketers that send e-mail will remove consumers from their e-mail mailing lists if they indicate that they wish to be removed," said Mrs. Harrington. "Unfortunately, other spammers won't do that or can't do it. So we actually don't have good advice for consumers on "remove me."

E-mail marketing analysts say the Internet is too unregulated to allow the control of spam. They say if the government banned legal spam coming from the United States, more would come from countries like Mexico, Russia, or Taiwan.