Internet Marketer Will Pay $900,000 CAN-SPAM Penalty

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Internet marketer Jumpstart Technologies agreed to pay a $900,000 civil penalty, the largest assessed under the CAN-SPAM Act to date, to settle a complaint filed by the Federal Trade Commission, the FTC said yesterday.


The FTC complaint alleged that Internet marketer Jumpstart Technologies LLC, San Francisco, sent commercial e-mails for its FreeFlixTix promotion that appeared to be personal messages. The messages contained deceptive subject lines and headers to evade spam filters, according to the FTC.


The complaint further alleged that the offer in the e-mail promotions was deceptive and violated section five of the FTC Act prohibiting unfair and deceptive business practices.


Under the settlement, Jumpstart admitted to no wrongdoing. Aside from the monetary penalty, the company is barred from violating the law in the future, according to a consent decree. The complaint and consent decree were filed in the Northern District of California on March 21.


In other FTC news, the commission settled a complaint against two individuals accused of taking part in a fraudulent business opportunity scam that was the focus of "Project Biz Opp Flop," a crackdown on violations of the FTC's Franchise Rule, which requires that prospective franchisees be given a full disclosure document about business opportunities they are offered, and section five of the FTC Act.


The defendants were Shannon Kirk Holden of The Global Connection and Scott Douglas Rinaldo, involved with World Traders Association Inc., International Merchandise Group and The Global Connection.


According to the FTC complaint, false and deceptive promises were made to franchise purchasers.


Under a stipulated judgment and order for permanent injunction proposed by the FTC, both defendants are prohibited from making misrepresentations to consumers who might purchase business ventures, goods or services.


Judgments of more than $30.7 million for Rinaldo and more than $491,000 for Holden represent the amounts of consumer injury attributed in the case. They will be suspended due to the defendants' inability to pay but will be imposed if they are found to have misrepresented their financial condition.


The stipulated judgment and order were filed in U.S. District Court for the Central District of California.


Kristen Bremner covers list news, insert media, privacy and fundraising for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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