The fine is the
largest imposed so far for breaches of the Controlling the Assault
of Non-Solicited Pornography and Marketing Act, also known as the
CAN-SPAM Act.
According to the FTC, the San-Francisco based firm breached the
rules in the course of its FreeFlixTix promotion, in which it
disguised its commercial emails as personal messages, and misled
consumers as to the terms and conditions of the promotion.
“These defendants intentionally used personal messages as a
cover-up for commercial messages," said Lydia Parnes, Director of
the FTC's Bureau of Consumer Protection. “Deceptive subject lines
and headers not only violate the CAN-SPAM Act, but also consumer
trust.”
The FTC’s complaint alleges that Jumpstart offered free movie
tickets to consumers in exchange for the names and email addresses
of five or more of their friends. Jumpstart then sent them
commercial emails with the consumer’s email address in the “from”
line and a seemingly personal “subject line,” such as, “Hey,”
“Happy Valentine’s Day,” “Happy New Year,” “Movie time. Let’s go.”
or “Invite.”
Jumpstart also made it look as if the consumer had written the
message text. In this way, Jumpstart’s commercial emails
circumvented certain spam filters and were opened by consumers who
thought they contained personal correspondence, says the
regulator.
According to the FTC, people received six or more emails urging
them to join FreeFlixTix, some containing advertisements for other
products or services offered by Jumpstart or its partners. In many
instances, the complaint alleges, the subject lines of the emails
falsely indicated that their friend was sending them free tickets,
and many people who tried to opt out of the promotion kept getting
similar emails for weeks afterward.
The FTC’s complaint also alleges that the company engaged in
deceptive advertising by misleading consumers about the terms and
conditions of the FreeFlixTix promotion.
To qualify for a “free” movie ticket, some consumers had to
submit their credit card information to one of Jumpstart’s
advertising partners and sign up for one of their promotions.
Certain advertising partners required that consumers pay for the
promotion, while others made “free” offers that had to be cancelled
at a later date to avoid a charge.
According to the complaint, Jumpstart violated provisions of the
CAN-SPAM Act by sending commercial emails with false or misleading
subject and “from” lines, sending emails more than 10 business days
after receiving an opt-out request from consumers, not clearly
identifying messages as advertising or solicitations, and not
clearly informing recipients that they could opt out of receiving
more emails.
Its unfair or deceptive marketing also violated the Federal
Trade Commission (FTC) Act, says the complaint.
Jumpstart, which has not admitted any wrongdoing, has agreed to
pay $900,000 to settle the complaint. The company has also been
prohibited from violating the CAN-SPAM Act and the FTC Act in the
future.
