Spammers Beware: ISPs have more legal clout than ever

If you market your products and services by sending unsolicited email, stop! It can really cost you.

Courts are starting to recognize the rights of ISPs to go after the senders of unsolicited commercial e-mail. While this may never completely eradicate spam, ISPs can take heart that states are finally starting to implement anti-spam legislation, and a growing number of judges are siding with them.

Most recently SimpleNet, a discount web-hosting provider in California, won a default judgement of $174,000 in compensatory damages from a group of spammers. VNZ Information and Entertainment Services, and Far East Mortgage Services were among the defendants in SimpleNet’s case. None showed up in court and SimpleNet won by default.

But the default judgement didn’t fully satisfy SimpleNet. The company is now pursuing criminal charges against the spammers, says General Counsel Allen R. Cocumelli. “The defendants have orchestrated an intricate and highly deceptive plan to defraud SimpleNet and its customers,” he says. “We will pursue criminal charges.”

SimpleNet took legal action after the defendants illegally obtained mailing lists of SimpleNet’s customers. Despite SimpleNet’s demands to stop transmissions, the spammers sent hundreds of e-mails an hour promoting a book, “Meet, Attract and Date Gorgeous Women.” To hide their identity, the spammers used random user names, domains and IP addresses.

“SimpleNet has had to endure a series of deceptive and damaging acts,” says Cocumelli. “Our action sends a loud and clear message that we will not tolerate further damage to our equipment and reputation.”

Among the arsenal of laws SimpleNet contends to have on its side is the California Data Access and Fraud Act, plus the federal Computer Fraud and Abuse Act and the Lanham Act.

But none of these are specific to spam. And while SimpleNet’s case was outrageous enough to anger the judge in the case, its standing may have been even more clear if the company was headquartered in Nevada or Washington State.

A couple of years ago, Nevada became the first state to enact laws that specifically address spam. The Nevada law requires anyone sending bulk e-mail to offer its recipients a removal list. Unfortunately, to the chagrin of anti-spammers, there is no penalty for violating the law– a result of heavy lobbying by the Direct Marketing Association.

Also, Washington passed a stronger anti-spam law. The DMA succeeded in its efforts to water down this one too, but the final legislation does carry a penalty and addresses several issues important to ISPs It is now illegal in Washington to forge the return address on bulk e-mailings. Also, hijacking — or relaying spam through an unknowing third party — is against the law. Anyone receiving spam can sue the spammer for $500 or actual damages, whichever is greater. ISPs can file civil suits claiming damages of $1000 or actual damages, whichever is greater.

If the recent judgement against SimpleNet was not enough to stop spammers, the company may soon have some legislative backing. California lawmakers are in the process of passing an anti-spamming law similar to Washington’s.

While the new rules are certainly a step in the right direction, spammers are already finding ways around them. A growing number of spammers are using ordinary $19.95 dial-up accounts to distribute their junk-mail before quickly moving on. This wham-bam-thank-you-ma’am approach allows spammers to remain anonymous and continue to clog mail servers.

One judge is trying a new tactic: public embarrassment. Earthlink won a consent judgement against infamous bulk e-mailer, Cyber Promotions. According to the judgement, in addition to paying Earthlink $2 million for trespassing on computer resources, Cyber Promotion’s founder Sanford Wallace had to write a formal letter of apology to Earthlink and its members.

Will it prove a deterrent? Probably not. But Earthlink is hopeful its latest victory at least puts a dent in Cyber Promotions’ wallet and starts a precedent for a spam-free network. “We have been very aggressive in our crusade against unsolicited junk e-mail,” says Paul F. (Pete) Wellborn, Ill, Earthlink’s lead litigator form Atlanta-based Hunton & Williams. “This judgement not only puts one of the most notorious offenders in dire financial straits, it also paves the way for future litigation against spammers.”

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