Online Advertiser Settles With FTC

    November 29, 2007

The Federal Trade Commission has reached an agreement with Adteractive, an online advertising company, for its use of misleading spam emails and online advertising to attract people to its Web sites.

The settlement, filed by the Department of Justice on behalf of the FTC, requires Adteractive to disclose the costs and obligations to receive the advertised "gifts" and prohibits it from sending email that violates the CAN-SPAM Act. The company will pay $650,000 in civil penalties.

While doing business as and, Aderactive sent email spam to people advertising free gifts such as flat-screen televisions and laptops. For example the company used email subject lines such as, "Test and keep this Flat-Screen TV," and "Congratulations! Claim your Choice of Sony, HP or Gateway Laptop."

When people went to the promotional Web sites, they found out that the items were not free, said Stephen Cohen, senior attorney for the FTC. "Some of the offers that they presented to consumers required consumers to spend money," he said. Other offers asked visitors to apply for credit cards, qualify for the cards, and use them.

The FTC began investigating Aderactive in April 2006, after receiving complaints from consumers, Cohen said. The company agreed to the settlement and the judge signed the order on November 27.

 Commissioner Jon Leibowitz said he was concerned that "the civil penalty that Adteractive must pay is a downward departure from our other CAN-SPAM Act cases and is not adequate to deter violations in the future."