Web crime: Feds warn those involved in chain e-mails

February 13, 2002

More than 2,000 people involved in an Internet chain letter that promises "$46,000 or more in the next 90 days" are receiving government warnings that the scheme is illegal, the Federal Trade Commission said Tuesday.

"This is the kind of activity that somebody's grandmother could be engaging in without fully appreciating that it's illegal," said Eileen Harrington, a director with the FTC's division of marketing practices. "The vast majority of participants will lose money."

The warnings say the FTC has already sued people for being involved with the chain e-mail. Recipients of the warning are told that, to avoid a similar fate, they should stop promoting the chain and return any money they have received.

The scheme promises extravagant amounts of money in exchange for consumers sending $5 in cash to each of four or five people on a list. Recruits add their own names to the top of the list before sending it on.

The chain e-mails even suggest that skeptical recipients contact Harrington's office at the FTC to confirm that the scheme is legal.

FTC Chairman Timothy J. Muris said the warnings are part of a larger campaign against junk e-mail that he announced in October.

"We're going after deceptive spam and the people who send it," Muris said. "We want it off the Net."

In September 2000, the FTC sent a first round of warning letters to 1,000 people involved with the chain e-mails. The agency received responses from many people who confessed, apologized or said they did not know the letters were illegal.

But a follow-up probe, including a sting operation in which investigators posed as chain letter participants, found others who kept sending the chain e-mails despite the warning.

The FTC said it sued and settled charges against seven of the worst offenders who sent out mass mailings. The seven people could face fines or imprisonment if they are ever again involved in deceptive marketing schemes, Harrington said.

The identities of those involved with the chain e-mail were culled from a government database that each day collects about 15,000 unsolicited junk e-mails passed along by consumers. The FTC said it has collected more than 8 million spam messages since 1998.

E-mail scams often involve business opportunities that turn out to be illegal pyramid schemes; work-at-home jobs, such as envelope stuffing and craft assembly; and bogus weight-loss products that promise to melt away fat cells.

Harrington said more lawsuits against deceptive spammers will be coming soon, including possible actions against those who break promises to remove consumers from junk e-mail lists.

Addressing e-mail con artists, Harrington added, "Be warned that if you are using e-mail to perpetrate a deception, the Federal Trade Commission is watching and we may come after you."