For
Release: February
11, 2004
“Playstation
2 Spammers” Settle with FTC
Court Orders End to Spam Scam
that Exposed Consumers to Graphic Adult Content
Defendants who sent spam promising a free
Sony Playstation to lure consumers to pornographic Web sites,
then redirected consumers’ Internet connections through
a 900-number with a significant per minute charge, have agreed
to settle Federal Trade Commission charges that their unfair
and deceptive practices violated federal laws. The settlement
shuts down the defendants’ alleged scam and permanently
bars the defendants from sending any e-mail that misrepresents
the identity of the sender or the subject of the e-mail.
In a complaint filed in U.S. district court,
the FTC charged that the defendants sent e-mail claiming that
consumers had won a Sony Playstation 2 or other valuable prize.
Consumers who received the spam were told to click a hyperlink
to collect their prize. The e-mails often had subject headings
that said “Yahoo Sweepstakes Winner” and “You
have just won a gift from Yahoo.” Once a consumer clicked
on the hyperlink, the FTC alleges, they were taken to a Yahoo!
look-alike Web site, featuring the “Yahoo!” logo,
graphics, and the words “Copyright © 2001 Yahoo,
Inc. All rights reserved.” The FTC’s complaint
states that consumers were instructed to press “yes”
to download software needed to complete a form to claim their
prize, and were told that the connection would be toll-free.
Once the consumer clicked “yes” and completed
the download, his or her computer would be disconnected from
its Internet connection and reconnected through a 900-number
with a per minute charge of up to $3.99.
The FTC alleges that consumers were never
told that downloading and executing the software would result
in significant charges, and that the promise of a Playstation
2 was false and deceptive. The settlement bars Christopher
Baith, Cosme Monarrez, Jr., and Sorabh Verma from misrepresenting
any fact and from sending spam that misrepresents the identity
of the sender or the subject of the e-mail. The court also
ordered Baith to pay $10,000, of which he will pay $2,500.
The settlement states that Baith will be required to pay the
remaining sum if it is determined that he misrepresented his
financial situation.
In a separate action, BTV Industries, the
company that created the modem dialer software that Baith,
Monarrez, and Verma allegedly used in their scheme, also will
settle FTC charges.
The FTC’s complaint against BTV Industries,
Rik Covell, and Adam Lewis alleges that the defendants violated
the FTC’s 900-Number Rule by failing to clearly disclose
to consumers using their software that they would be connected
to the Internet through a 900-number and would incur charges
of up to $3.99 per minute. The settlement permanently bars
the defendants from failing to disclose the cost of accessing
any 900-number pay-per-call service, as well as from misrepresenting
that consumers have won a prize, that consumers will be connected
to any Web site toll-free, and that any of BTV’s products
or services are associated with a third party. BTV Industries
has given up $25,000 in alleged ill-gotten gains.
Both stipulated final orders contain standard
recordkeeping provisions to assist the FTC in monitoring the
defendants’ compliance.
The Commission vote to authorize
staff to file the complaints and stipulated final orders was
5-0. The complaints and stipulated final orders for
permanent injunction were filed in the U.S. District Court
for the District of Nevada.
Note: Stipulated final
judgments and orders are for settlement purposes only and
do not constitute an admission by the defendant of a law violation.
A stipulated final order requires approval by the court and
has the force of law when signed by the judge.
Copies
of the complaints and orders are available from
the FTC’s Web site at http://www.ftc.gov
and also from the FTC’s Consumer Response Center, Room
130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.
The FTC works for the consumer to prevent fraudulent, deceptive,
and unfair business practices in the marketplace and to provide
information to help consumers spot, stop, and avoid them.
To file a complaint, or to get free information on any of
150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357),
or use the complaint form at http://www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft, and
other fraud-related complaints into Consumer Sentinel, a secure,
online database available to hundreds of civil and criminal
law enforcement agencies in the U.S. and abroad.
MEDIA CONTACT:
Jen Schwartzman
Office of Public Affairs
202-326-2674
STAFF CONTACT:
Renard Francois or Tara Flynn
Bureau of Consumer Protection
202-326-2251 or 202-326-3710
FTC File No. 022 3291 (Baith, Monarrez,
Verma)
FTC File No. X020029 (BTV Industries)
(http://www.ftc.gov/opa/2004/01/firstamerican.htm)
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Related Documents:
Federal
Trade Commission, v. Christopher Baith, Cosme Monarrez, Jr.,
and Sorabh Verma, defendants, (U.S.
District Court, District of Nevada), Civil Action No. CV S-03-1306-LRH-RJJ,
FTC File No. 022 3291, FTC File No. X020029
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