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Spammers Fined Two Million

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Oct 27, 2003 12:00 AM PST    Text size: 
SANTA CLARA, Calif. – In the largest settlement in history against senders of spam email, a Santa Clara County Superior Court judge fined two spammers two million dollars in civil penalties for violating state laws that prohibit unsolicited commercial email, false advertising, and unfair business practices.

According to Attorney General Bill Lockyer's office, the point of the case was to send out a stern warning to email marketers that the state of California fully intends to enforce anti-spam laws to the maximum penalty in the future.

"We think other spammers will think twice about what they are doing,'' said a representative for Lockyer's office.

The company, PW Marketing based in Los Angeles, was first red-flagged by regulators last year as the originator of bulk emails advertising a book on how to be a spam email marketer. The book sold for $39 and was part of an aggressive and continuous email strategy, regulators said.

According to Lockyer's office, PW Marketing did not include valid contact information in the body of the emails so that recipients could unsubscribe, and were thereby in violation of a 1998 spam law that requires either a toll free number or valid contact information.

The law also requires email marketers to include the words "ADV" in the subject line, or "ADV:ADULT" for adult entertainment content.

After a prolonged investigation, PW Marketing was linked to defendants Paul Willis and Claudia Griffin. Lockyer's office pressed charges in September 2002.

The defendants did not make an appearance in court and prosecutors are not sure that the penalty will ever be received.

Judge William Martin also imposed business restrictions on the defendants.

According to prosecutors, because the charges against Willis and Griffin were civil, they will also be the subject of a Federal Trade Commission (FTC) suit.

Today's suit comes on the heels of last week's Senate-approved anti-spam bill that now faces the final stretch before it is enacted into law. That final process will include the drafting and approval of a similar bill in the House and then a signature from President George Bush.

The bill would direct the FTC to create a "do-not-spam" registry similar to the nationwide do-not-call list for telemarketers. It would enable consumers to opt-out of receiving future spam, and it would allow the FTC, state attorney generals, and Internet service providers to seek civil damages against spammers for $25 to $300 per email, and jail terms up to five years.

California also recently passed a statewide bill that goes in effect on Jan. 1. The law prohibits unsolicited email advertisements sent to or from any California email address, unless the recipient gives prior permission (under current law the recipient has to opt out), or has an existing business relationship with the sender. It also permits private individuals to sue spammers and collect actual damages, plus $1,000 per email and up to $1 million per incident.

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