Tucson- Federal regulators last week accused seven companies, including a Tucson business, of hiring others to send illegal e-mails with pornographic messages to lure consumers to visit adult Internet sites.
Federal Trade Commission officials said four of the companies have agreed to pay nearly $1.16 million to settle the charges. The FTC directed the Justice Department to file lawsuits against the other three companies, including Cyberheat Inc. of Tucson.
“This X-rated e-mail is electronic flashing,” said Lydia Parnes, director of the FTC’s Bureau of Consumer Protection, in a statement released yesterday. “It exposes kids and other unwary consumers to graphic sexual content and it is unwanted, offensive and illegal.”
Cyberheat officials directed all inquiries about the accusations to Seattle attorney Robert S. Apgood, who said the company “denies all the allegations in the complaint filed against it, and will vigorously defend against those claims.”
Cyberheat, 6614 E. Tanque Verde Road, is an online marketing company that also operates a couple of search engines, Apgood said. He did not know how many people the company employs in Tucson.
Don V. Ho is listed as the president and chief executive of the company in the most recent Arizona Corporation Commission records. In the records, Ho characterized Cyberheat as an entertainment company.
Other companies sued by the Justice Department were T.J. Web Productions of Henderson, Nev., and Impulse Media Group Inc. of Seattle. The lawsuits seek unspecified payment to the government for “every violation” of the federal anti-spam law.
In settlements announced by the FTC, BangBros.com Inc. of Miami agreed to pay $650,000; MD Media of Bingham Farms, Mich., agreed to pay $238,743; and APC Entertainment Inc. of Davie, Fla., will pay $220,000. Pure Marketing Solutions LLC of Miami and affiliate Internet Matrix Technology of New Orleans will together pay $50,000. The two companies were named together in a single lawsuit.
Companies that settled agreed to refrain from future violations and to allow the FTC to monitor compliance.
The FTC’s Adult Labeling Rule and the CAN-SPAM Act require commercial e-mailers of pornographic material to use the phrase “sexually explicit” in the subject line of the e-mail message. The commission said Cyberheat and the other firms failed to comply with that rule and also violated a regulation calling on them to provide a clear and conspicuous mechanism to block future e-mails.
“The Adult Labeling Rule was designed to protect consumers who don’t want to be exposed to random assaults of sexual material and others, like kids, for whom it is inappropriate,” Parnes said. “It’s the law and we intend to enforce it.”
FTC officials said Cyberheat and the other companies did not send e-mails directly to consumers, but operated “affiliate marketing programs” that paid others to send spam on their behalf, which is a violation of the “Can Spam” law.