A Cyberscam That Uses Spam

Clifton Taylor's 12-year-old grandson was doing his homework on the Internet when he received an e-mail message saying his order for a purchase had been processed and $375 would be billed to his credit card in the next two days.

To cancel the order that he had never placed, the 7th-grader was supposed to call the number on the screen immediately. But instead of a consumer representative, on the other end was a pornographic recording from a Web site in the West Indies. The international toll call popped up on the family's phone bill shortly after.

"This approach was so different it caught us by surprise," said Taylor, a retired school teacher living outside of Charlotte, North Carolina.

The scheme, a combination of spamming, or junk e-mail, and telemarketing fraud, has already prompted 20,000 consumers to complain to America Online.

The Federal Trade Commission on Tuesday announced a suit filed in U.S. District Court in Charlotte against the unknown defendant who masterminded the scam. The agency says this action - the first taken against an unnamed perpetrator - is a warning to con artists who try to hide behind the vast, faceless Internet.

"Anonymity doesn't necessarily stand in the way of some kind of law enforcement," said Eileen Harrington, the FTC's associate director of marketing practices. "We sued them anyway."

Harrington predicts the commission will have enough information to name a defendant in a few days. In the meantime, the court order has blocked the flow of money from American telephone carriers to the foreign telephone company that pays the operators of the hotline.

The case highlights some of the inherent challenges in tracking down and stopping the senders of junk e-mail, also known as spam. A common tactic among con artists sending spam, including those cited in Tuesday's action, is to use a variety of forged e-mail addresses so they cannot be reached.

Ray Everett-Church, co-founder of the Coalition Against Unsolicited Commercial E-Mail, likens the problem to the arcade game "whack-a-mole": No sooner does the mole get hit by the mallet in one place, than it pops up quickly in another.

"Spammers rapidly move from sending site to sending site," said Everett-Church. That makes it futile for a server provider to block one specific e-mail address. But, he added, companies can block e-mails based on their content, for example filtering out all messages that contain a particular word or telephone number.

"The problem comes in finding similarities you can block," he said.

The FTC says it is raising the ante against fraud with its own technology. More than a year ago, the commission began collecting spam forwarded to it by consumers, creating a database with hundreds of thousands of messages in it.

The FTC has asked the court for the money already paid by customers to their telephone companies for the toll harges to be put aside for consumer restitution and for the company to be barred from violating the law through its deceptive messages.

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