April 29, 2004

Contact: NCL Communications Department

First CAN-SPAM Cases Brought

On April 29, 2004 the Federal Trade Commission, U.S. Department of Justice, and Postal Inspection Service announced action against two spam operations under the CAN-SPAM Act, which went into effect on January 1. Detroit-based Phoenix Avatar and Global Web Productions, a company that operates out of Australia and New Zealand, allegedly sent hundreds of thousands of unsolicited emails with links to information about their bogus diet products, using “spoofed” headers to make it appear that the messages were coming from someone else. If the spam messages were undeliverable, they bounced back to the innocent parties whose email addresses were forged on the headers, flooding their servers and sometimes resulting in them being accused of spamming. Between the two companies, they generated nearly a million complaints to the FTC since the first of the year. 

CAN-SPAM makes it a felony to falsely or deceptively hide the origin of commercial emails. Four people involved with Phoenix Avatar are being arrested on the felony charges. They and the company also face civil penalties for using deceptive headers, failing to provide the ability to opt-out of receiving future emails, and making false claims about their diet patches. In addition, they have been charged with violating federal mail fraud laws.

Charges have been filed against the defendants in the Global Web Productions case for various violations of CAN-SPAM and the FTC Act, but it is unclear what success U.S. authorities will have in pursuing them across international borders. The U.S. is getting assistance from the Australian Competition and Consumer Commission and the New Zealand Commerce Commission. For more information, go to www.ftc.gov/opa/2004/04/040429canspam.htm.

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