FTC settles CAN-SPAM dispute

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Spear Systems Inc. and its officers Bruce Parker and Lisa Kimsey have settled a case brought against them by the Federal Trade Commission, which claimed that the defendants sent unsolicited e-mail for weight loss supplements.

The Commission voted to accept the settlements for the case, which was filed in the US District Court for the Northern District of Illinois, by a 4-0 vote.

The settlement requires a $29,000 fine and bars the defendants from making false or unsubstantiated claims about health benefits of any food, drug or dietary supplements, and bars them from violating the CAN-SPAM Act.

The FTC brought charges against the defendants in the United States, Canada and Australia in October 2007.

According to the FTC complaint, the defendants falsely claimed that their hoodia products cause rapid, substantial and permanent weight loss.

In addition, the FTC alleged that the operation violated the CAN-SPAM Act by initiating commercial e-mails that contained false "from" addresses and deceptive subject lines, and failed to provide an opt-out link or physical postal address.

The FTC asked the court to order a halt to the illegal operations, pending trial.

Litigation continues with another defendant named in the October 2007 complaint, Xavier Ratelle, a Canadian national based in Quebec.

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