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FTC warns junk e-mailers

WASHINGTON ­ Federal regulators put the junk e-mail industry on noticeThursday that businesses will be punished if they put false informationin unsolicited mail they send to millions of Internet users.

The Federal Trade Commission also asked the industry to come up withways to stem the flood of commercial mail clogging the Internet and creatingbottlenecks that make it difficult to get online.

The FTC said it would ask industry groups to supply lists of junk-mailsenders to help in the new drive to detect fraud. Penalties a junk mailermight face for breaking the fraud law could include an injunction to stopthe illegal practice and up to tens of thousands of dollars in fines fora repeat offender.

We will try to go after them and prosecute some fraud, FTCcommissioner Christine Varney said in an interview between hearings Thursday,the third day of the agency's weeklong hearings to address an array of onlineprivacy intrusions.

Concern has mounted about junk e-mail as more businesses seek to enticeWorld Wide Web users to buy products and services. Sending masses of e-mailis vastly cheaper than mass mailings through traditional means. Commissionersheard testimony that a mailing list of Web users costs as little as $11per million names.

The result is that Web users increasingly are greeted when they log onby the equivalent of a stack of mail from parties they don't know. The quantityis adding to the network bottlenecks that have slowed transmission of dataand information across the Internet.

In addition, people increasingly report e-mail scams that dupe them intosending money or credit-card numbers but give nothing in return.

FTC officials said they would focus on two types of confidence operations.

One involves businesses that provide false names, Internet addressesor other identity in the e-mails they send, particularly if they invitepeople to write back to stop future e-mails. Because of the fake identities,the requests typically bounce back to the Web user without action.

The other involves junk mailers who lie to consumers, such as investmentand business opportunity scams.

Several major junk e-mailers and industry groups representing them saidthey would cooperate with the FTC, including supplying names of fellow mailers.

We have to play by the rules, said Sanford Wallace, presidentof Cyberpromotions Inc. We want to set an example.

For now, at least, the FTC has decided to let the industry slow the floodof unsolicited mail on its own instead of pushing for government rules suchas an outright ban of junk mailing. Regulators at Thursday's hearing askedindustry and consumer groups to create a panel to examine the problem andreport back in six months.

Junk e-mail costs Web users money because they pay for the Internet connectiontime, including the time it takes them to read and delete the offendingmessages.

In addition, companies that provide Internet service are hit with thecost of having unscrupulous e-mailers relay messages through their computerson their way to other recipients. The method is used by some junk mailersas a way to disguise their identities.