Operators who used spam (unsolicited e-mail solicitations) and look-alike Web sites to con consumers into turning over confidential financial information have settled charges with the Federal Trade Commission.
The two settlements bar the defendants from sending spam, making false claims to obtain consumers’ financial information, misrepresenting themselves and from using, selling, or sharing any of the sensitive consumer information collected, the FTC said.
The defendant named in one of the complaints is Zachary Keith Hill. The Hill case was filed last December in U.S. District Court for the Southern District of Texas. The other case, filed last month, charged an unnamed minor in U. S. District Court for the Eastern District of New York.
The FTC agreed to consider the $125,000 judgments in each case satisfied. If the court finds that the financial documents were falsified, however, the defendants will pay $125,000 in consumer redress.
One of the defendants also faces 46 months in prison on criminal charges filed by the Justice Department.
The scam, called “phishing,” worked like this: posing as America Online, the defendants allegedly sent consumers e-mail messages claiming that there had been a problem with the billing of their AOL accounts. According to the FTC, the e-mail warned them that if they did not update their billing information, they risked losing their accounts. The messages directed consumers to click on a hyperlink in the body of the e-mail to connect to the “AOL Billing Center.”
When consumers clicked on the link they landed on a site that contained AOL’s logo, AOL’s type style, AOL’s colors, and links to real AOL Web pages. It appeared to be AOL’s Billing Center, but it was not, the FTC alleged. The defendants had hijacked AOL’s identity and used it to steal consumers’ identities. The defendants ran a similar scam using the hijacked identity of PayPal, according to the FTC.
The FTC charged the defendants with violating the FTC, which bars unfair and deceptive practices, and the Gramm Leach Bliley Act, which bars using false or fictitious statements to obtain consumers’ financial information.
The settlements bar the defendants from making false, fictitious, or fraudulent statements to obtain financial information from consumers. They bar the defendants from using or sharing the sensitive information collected from consumers and require that all such information be turned over to the FTC.
Financial judgments were stayed because the defendants revealed through financial disclosure documents that they currently are unable to pay consumer redress. Should the court find that the financial disclosure documents were falsified, the defendants will be required to pay $125,000.
Network
