IBB and it's principals claimed, both in spam and on their website, to operate "City Edition" Internet newspapers. IBB sold opportunities to lease and then sublet "billboard" advertising space in those sites. Their spam advertisements guaranteed that investors would sublet at least 25% of their space and make a 100.8% profit in the first year and guaranteed that occupancy rate. According to the FTC complaint, the defendants also promised refunds if investors didn't make at least $5000 to $7,500. The FTC alleged that few investors earned as much as IBB claimed and that IBB did not provide refunds when investors earnings fells short. According to the complaint, that meant that IBB's advertising claims were false, misleading and in violation of federal law (the FTC Act).
"Unsolicited commercial e-mail -- 'spam' in Internet lingo -- is an irritant to consumers. When the spam makes false and misleading claims, it's more than an irritant -- it's against the law," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "The rules for advertising by e-mail are the same as the rules for advertising through the regular mail: don't mislead or lie to consumers, or the FTC will come after you."
In addition, the FTC claims that the "investments" sold by IBB were actually franchises as defined by the FTC's Franchise Rule. Under that rule, IBB should have provided a disclosure document containing the history of the company and its principals, the names and addresses of all other franchisees, and other crucial information. That document should have also included the calculations used by IBB to estimate potential earnings. According to the FTC, the defendants did not provide that required document and failed to provide written substantiation of earnings claims.
The FTC has asked a US district court to bar future violations of the FTC Act and the Franchise Rule and to order refunds for all customers of IBB.
For more information on the FTC's case against IBB, check out the FTC press release.
If you would like to report spam you think might be fraudulent, forward it to the FTC at uce@ftc.gov and to NCL's National Fraud Information Center. You can also ask questions or report incidents to NFIC by calling 1-800-876-7060 or by using one of our online forms.
| PRINT PREVIEW |
| SEARCH THIS SITE |
Links for Non-Frames Version | Current News & Views | | Subject Index of Past Articles | | Chronological Index of Past Articles | | About NFIC | About the National Consumers League | | About the Alliance Against Fraud in Telemarketing | | Telemarketing Fraud | Internet Fraud Watch | | Fraud Against the Elderly | | News & Views | Links | For the Media | | How to Report Fraud & Ask Questions | | Back to Welcome Page (Frames Version) |
NFIC is a project of the National Consumers League. All rights reserved. © 1998.