July 2, 2004 11:54 AM PDT

Massachusetts files suit under Can-Spam

The Massachusetts Attorney General's office has filed suit against a Florida man suspected of sending spam e-mail to thousands of consumers, in what's considered to be the first claim brought by a state under the federal Can-Spam Act.

On Thursday, the state's attorney general, Thomas Reilly, filed a complaint against a business known as DC Enterprises, and its reported proprietor, William T. Carson, for allegedly distributing bulk e-mail that advertised inexpensive mortgage rates. In addition to alleging that the company violated numerous conditions of Can-Spam, the federal government's freshly minted answer to the spam epidemic, Reilly is pursuing charges against the defendant for breaching several Massachusetts laws that deal with mortgage brokering.

Calls to a phone number listed under Carson's name in Weston, Fla., the town listed as the defendant's residence by the Massachusetts filing, were not immediately returned. The Attorney General's office reported that its own attempts to contact Carson have also gone unanswered.

According to the Massachusetts complaint, Carson's e-mail campaigns ignored major stipulations of Can-Spam by featuring misleading header information and failing to offer an "opt out" opportunity for consumers who wanted to avoid further solicitation. The e-mails, which were sent bearing headers that offered loan approvals for individuals with bad credit and guaranteed financing, also failed to identify themselves as advertisements. Additionally, they lacked a working return e-mail address or valid postal address for DC Enterprises, as required by Can-Spam.

The claim says that recipients who clicked on links in Carson's e-mails were taken to a Web page where they were asked to provide personal information under the guise of applying for a loan. These pages sporadically offered people the ability to opt out of future marketing campaigns, but those functions did not actually stop delivery of subsequent e-mails, Reilly contends.

In addition, Reilly said in his filing that DC Enterprises violated multiple provisions regulating mortgage banks in Massachusetts, by failing to register with the state for appropriate licensing and by marketing its services using an invalid address.

Based on his case, Reilly is seeking a permanent injunction against Carson, along with some form of restitution for consumers and payment of the state's legal fees related to the lawsuit.

Since it became law in December, Can-Spam has failed to generate significant litigation, despite the continued proliferation of spam marketing campaigns. In April, the U.S. Department of Justice filed a criminal complaint against four Detroit-area men under Can-Spam, which is considered the first case sparked by the legislation.

 

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