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FTC Announces Cross-Border Scam Sweep

The Federal Trade Commission announced a nationwide sweep yesterday involving 12 law enforcement agencies that resulted in 63 legal actions being taken against companies accused of running Internet scams.

Eight U.S. state agencies and four Canadian agencies participated in the operation. Targets of the sweep include:

· Universal Direct, accused of running an illegal chain e-mail scheme promising participants $10,000 in cash and gifts within a few months of joining. The FTC is seeking a federal court order in Ohio for the company to cease operations and return money to consumers.

· David L. Walker, an individual, accused of using a Web site to market “bioresonance therapy and molecular enhancer” treatments for $2,400 to $5,200 with the claim that they make conventional cancer treatments unnecessary. The FTC asked a federal judge in Tacoma, WA, to bar Walker from making the claims and forcing him to repay consumers.

· Sound City 2000, accused of running a Web site that marketed CDs but delivered late, or not at all, and failed to make refunds promptly. Sound City 2000 settled the case in a federal court in Oregon and agreed to repay consumers.

· A fourth case is under seal by order of a U.S. District judge, the FTC said.

In addition to the four cases, the FTC, along with six state agencies and Canada's Competition Bureau, sent warning letters to 500 individuals accused of running an illegal chain e-mail scheme. Consumers were promised easy money if they sent $5 to other participants in the scheme listed at the top of an e-mail, the FTC said.

In return for $5, consumers received instructions about how to start chain-letter schemes, the FTC said. The e-mails falsely claimed that the scheme was legal, according to the FTC.

In a separate action, the FTC said that it had tested whether unsubscribe e-mail requests were being honored. The FTC tested 200 e-mails that claimed to permit unsubscribes and found that the vast majority of requests did not go through. The investigation led the FTC to issue 75 more warnings to e-mailers.

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