Out-Law / Your Daily Need-To-Know
Internet marketing firm Jumpstart Technologies has agreed to pay $900,000 to settle a complaint by the Federal Trade Commission (FTC) that the firm violated US anti-spam rules by sending disguised and misleading emails to consumers. Jumpstart has not admitted any breach of the Act.
The fine is the largest imposed so far for breaches of the Controlling the Assault of Non-Solicited Pornography and Marketing Act, also known as the CAN-SPAM Act.
According to the FTC, the San-Francisco based firm breached the rules in the course of its FreeFlixTix promotion, in which it disguised its commercial emails as personal messages, and misled consumers as to the terms and conditions of the promotion.
“These defendants intentionally used personal messages as a cover-up for commercial messages," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. “Deceptive subject lines and headers not only violate the CAN-SPAM Act, but also consumer trust.”
The FTC’s complaint alleges that Jumpstart offered free movie tickets to consumers in exchange for the names and email addresses of five or more of their friends. Jumpstart then sent them commercial emails with the consumer’s email address in the “from” line and a seemingly personal “subject line,” such as, “Hey,” “Happy Valentine’s Day,” “Happy New Year,” “Movie time. Let’s go.” or “Invite.”
Jumpstart also made it look as if the consumer had written the message text. In this way, Jumpstart’s commercial emails circumvented certain spam filters and were opened by consumers who thought they contained personal correspondence, says the regulator.
According to the FTC, people received six or more emails urging them to join FreeFlixTix, some containing advertisements for other products or services offered by Jumpstart or its partners. In many instances, the complaint alleges, the subject lines of the emails falsely indicated that their friend was sending them free tickets, and many people who tried to opt out of the promotion kept getting similar emails for weeks afterward.
The FTC’s complaint also alleges that the company engaged in deceptive advertising by misleading consumers about the terms and conditions of the FreeFlixTix promotion.
To qualify for a “free” movie ticket, some consumers had to submit their credit card information to one of Jumpstart’s advertising partners and sign up for one of their promotions. Certain advertising partners required that consumers pay for the promotion, while others made “free” offers that had to be cancelled at a later date to avoid a charge.
According to the complaint, Jumpstart violated provisions of the CAN-SPAM Act by sending commercial emails with false or misleading subject and “from” lines, sending emails more than 10 business days after receiving an opt-out request from consumers, not clearly identifying messages as advertising or solicitations, and not clearly informing recipients that they could opt out of receiving more emails.
Its unfair or deceptive marketing also violated the Federal Trade Commission (FTC) Act, says the complaint.
Jumpstart, which has not admitted any wrongdoing, has agreed to pay $900,000 to settle the complaint. The company has also been prohibited from violating the CAN-SPAM Act and the FTC Act in the future.
