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Ad Firm Pays $900,000 for CAN-SPAM Violation

An online marketing company will pay almost $1 million to resolve allegations that it violated the federal anti-spam law by sending people unsolicited sales pitches that appeared to come from their friends or acquaintances.

The Federal Trade Commission, which filed the case against Jumpstart Technologies LLC of San Francisco, said the amount is the largest it has obtained so far for violation of the CAN-SPAM Act.

According to the agency's complaint filed in the U.S. District Court for the Northern District of California, Jumpstart offered consumers free movie tickets in exchange for providing e-mail addresses for five or more of their friends.

Jumpstart then sent those people unsolicited commercial messages that contained their friend's address in the "from" field and a personal-sounding subject line, making it appear to be a one-on-one communication from the friend, the FTC alleged.

The messages contained sales pitches for products or services offered by Jumpstart or its advertising partners, and the company's tactics enabled the messages to bypass spam filters, the FTC said.

Some individuals continued to receive the messages for weeks after telling Jumpstart they wanted to opt out, the agency said.

The FTC also alleged Jumpstart misrepresented the terms of the free-ticket offer, because people discovered they had to pay to get the tickets, or in other cases they had to sign up for "free" offers from Jumpstart partners that would result in charges unless the consumer canceled.

The CAN-SPAM Act of 2003 prohibits senders of unsolicited commercial e-mail from deceiving recipients about the origin or subject of the message. It also requires advertisers to allow recipients to opt out of receiving future messages.

Under the terms of a consent decree filed with the court March 23, Jumpstart will pay the $900,000 civil penalty and has agreed to permanently cease its allegedly unlawful practices.