FTC Hands Spammer Record $900K Fine

The Federal Trade Commission has levied a $900,000 civil penalty against San Francisco’s JumpStart Technologies for sending spam messages disguised as personal email.

According to the FTC, JumpStart’s FreeFlixTix promotion offered consumers free movie tickets in exchange for the named and email addresses of five or more friends. JumpStart then sent commercial email messages to those friends, using the referrer’s name and email address in the messages’ “From” line. JumpStart also used seemingly personal “Subject” lines (like “Happy Valentine’s Day”, “Movie Time. Let’s go,” or just “Hey”) and included message text designed to look like it had been written by the sender. The messages promoted FreeFlixTix, and also contained ads and promotions for other services offered by JumpStart and its partners. The FTC says JumpStart began its spamming operating in July, 2002.

JumpStart was also accused of engaging in deceptive advertising practices by providing misleading terms and conditions for the FreeFlixTix promotion. Consumers were sometimes required to provide credit card information to a JumpStart advertising partner to obtain “free” movie tickets; some JumpStart partners required consumers to pay for participating in the promotion, while others had “free” offers which consumers had to cancel at a later date to avoid charges. Some targets of JumpStart mailings received promotions weeks after attempting to opt-out of the system.

Although JumpStart has admitted no wrongdoing in the settlement, the company has agreed to pay $900,000 in fines, and will be permanently prohibited from unlawful practices. (Which makes one wonder whether the unlawful practices were permissible before the consent decree?) Under the CAN-SPAM Act, JumpStart would have been in violation of the law for sending commercial email messages with false or misleading subject lines and forged “From” lines, for failing to clearly identify the messages as advertising, for failing to provide a clear unsubscribe mechanism, and for continuing to send commercial messages more than 10 days after receiving an opt-out request.