FTC readies to confront spam

With several anti-spam bills in Congress, the Federal Trade Commission is gearing up to enforce any laws that pass, but it still hopes the industry can self-regulate.

If you think you get a lot of junk e-mail, it's still nothing compared with the FTC's in-box.

SAN FRANCISCO--The Federal Trade Commission acts as a catcher's mitt to about 17,000 pieces of unsolicited commercial e-mail per day, or 540,000 pieces a month, which are filed away into its spam-designated database. This mailbox, an unadvertised service set up by the FTC in 1998, is for consumers and Internet service providers to forward unwanted commercial e-mail.

"If (anti-spam) legislation passes this year, then we expect to receive up to half a billion pieces a month," Jennifer Mandigo, a staff attorney at the FTC in charge of enforcing any potential anti-spam laws, said at the SpamCon conference here. The massive database of e-mail lets the FTC search for spam trends or potential targets.

If consumers had federal recourse against spammers, they might be more likely to file a complaint or forward mail to the federal agency, but the likelihood of a law passing this year appears slim. One of the most visible bills before Congress this year, H.R. 718--introduced by Rep. Heather Wilson, R-N.M.--is "on the fast track to be killed," Mandigo said.

Nevertheless, the FTC is gearing up to enforce any laws Congress may pass this year, despite its support of industry self-regulation over federal laws.

"We would rather the industry take a crack at it first," Mandigo said.

Despite the absence of a federal law, the FTC has been acting the part of Big Brother for consumers hit with fraud via spam. "We're doing something. We're not just one of these bloated organizations," Mandigo said.

Thirty of the 182 Internet-related cases of fraud the FTC has filed involve spam. For example, the FTC successfully fought a spammer who advertised a pyramid scheme via e-mail, in FTC v. Martinelli in July 1999. The decision required that the defendants pay $72,000, which was returned to the fraud victims.

As with Net fraud, the FTC is concerned about spam because it's the easiest and most widespread means for disseminating fraudulent claims. It's also clogging in-boxes, costing time and money for consumers and Internet service providers.

For these reasons the agency is big on education, via workshops and the publishing of consumer information about junk e-mail. It also sets up educational Web sites about Internet fraud and spam, which are sometimes disguised as get-rich-quick or lose-weight-fast sites for effect.

Apart from these efforts, the FTC has testified at a hearing for a Senate anti-spam bill, S. 630. The agency is generally supportive of this bill and H.R. 718, its companion in the House, Mandigo said. The legislation allows the FTC to treat a violation as a trade-securities violation, for which it can collect up to $11,000 per occurrence.

"These are the best two bills we've seen--but maybe not the best," she said.

Both bills make it illegal to send commercial e-mail with false headers and subject lines and require the e-mail to let consumers opt out of receiving further communication.

One potential issue with the Senate bill, however, is that it requires a "knowledge standard for deceptive headers," which means that the burden of proof is on the FTC to establish that the sender of an unsolicited e-mail intended to send a deceptive message, she said.

"We all know (spam) injures consumerism but standing in front of a judge as the FTC and quantifying the injury, that's where it gets difficult," Mandigo said.