FTC Cracks Down on Sex Spam

— -- The U.S. Federal Trade Commission has sought lawsuits against three companies and settled with four others in a bid to stop illegal sexually explicit spam, the agency says.

The companies have been accused of violating the FTC's Adult Labeling Rule and the CAN-SPAM Act, which require senders of sexually explicit commercial e-mail to label it in the subject line and not show any graphic sexual images in the initial viewing area of the message, the agency said.

The agency went after adult-entertainment providers that use affiliate companies to send e-mail advertising, said Jon Kraden, a staff attorney at the FTC. Such companies commonly hire affiliates and tell them not to send illegal spam, but don't monitor them or stop them from doing so, he said.

"We thought we could get the most bang for our buck by going after the companies that were paying for this type of spam to be sent out," Kraden said.

"It should serve as a warning to these companies that they may be liable for the actions of their affiliates and that they need to pay closer attention to what those affiliates are doing," he said. In addition, the FTC has pursued individual spammers in the past and will continue to go after them, he added.

The FTC found the companies by searching its own database of spam forwarded by consumers and also was assisted by Microsoft, which maintains spam-trap e-mail accounts, Kraden said. The FTC's database alone receives about 300,000 messages per day, he said.

Under the four settlements, the companies paid a total of $1.159 million in civil penalties, are banned from further violations of the law and are required to monitor their affiliates in the future. They did not admit wrongdoing. The FTC can keep tabs on those companies by requesting records that show compliance with the settlements, Kraden said.

In the three other cases, the FTC asked the U.S. Department of Justice to file suits against the companies, which it was expected to do on Wednesday, according to Kraden. The suits will seek injunctions and civil penalties, which could total $11,000 per violation, he said.

BangBros.com, APC Entertainment, and Pure Marketing Solutions, all based in Florida, as well as Michigan-based MD Media and Louisiana-based Matrix Technology, all reached settlement agreements with the FTC. The DOJ is filing suits against TJ Web Productions, in Nevada; Cyberheat, in Arizona; and Impulse Media, in Washington, according to an FTC statement.