Who's spamming whom?

Who's spamming whom?

While the powers that be debate the ethics and legality of e-mail marketing, serious spammers are getting seriously rich.

You could get rich, download nude pictures of celebrities, buy penny stocks or start your own business. That's what rachel_g_246@ says. How the heck did she get your e-mail address? You, of course, are the victim of spam, unwanted e-mail sent in bulk to strangers, the moral equivalent in Internet culture of throwing spitballs.

When it comes via the postal service, you can usually trace junk mail back to some catalogue purchase or magazine subscription. If you don't want it, you can tell the post office to stop sending it.

But spam is a plague on those with e-mail addresses, as well as a burden on the bandwidth, disk space and server resources of Internet service providers.

To combat it, an entire industry of antispam software vendors has emerged. But as soon as somebody figures out a way to filter the e-mail out, the spammers figure out a way to get around the filter.

Because sending spam is a semi-underground industry, actual revenue figures aren't to be found. But there sure is a lot of it. According to IT analyst GartnerGroup, 84 per cent of Internet users have received spam. Not surprisingly, 63 per cent of the recipients say they "dislike it a lot", 20 per cent "dislike it somewhat", 14 per cent are neutral and only 3 per cent like it in any way. Spam, a tacky marketing tool, seems to be used effectively by tacky businesses. A company called the International License Bureau, for example, based in Kansas, offers a multinational driver's licence on a five-year contract for $50 a year, plus $10 a year toward the bureau's use of an issuing address in the Bahamas.

As customers and Internet service providers have grown more irate, lawmakers in the US have gotten busy, setting off a flurry of antispam legislation. Washington, California, Virginia and Nevada have all enacted laws regarding "commercial e-mail". Other legislation is pending in 18 states, and it's only a matter of time before a federal law is passed. GartnerGroup sounds the alarm: "If spam continues to grow at the current rate, if not exponentially, it may become an unmanageable issue. Customer ire is certain to increase with that onslaught, and ISPs will be faced with additional customer-service costs as they seek to control the flow of unwelcome e-mail while dealing with unhappy customers."

"We're not cockroaches crawling under the four corners of the carpet," says Brian Rasmus, president of Timely Products. "There are fly-by-nighters in any industry, but we're very ethical and aboveboard. This is a nice business with low overhead." Timely Products specialises in mass e-mail, and is headquartered in a location Rasmus would not disclose. For $100, the company will send your marketing message to 100,000 addresses; Rasmus says he has 2 million addresses to choose from.

Timely Products is one of many companies dev-oted to making it easy for people to send spam. Some companies, including Timely Products, will do it all - supply the e-mail addresses and send out the message. For do-it-yourselfers, there are vendors that sell the software to snag e-mail addresses off the Web; vendors that sell lists of e-mail addresses already "farmed", vendors that sell software for sending out tons of e-mail at once.

A call to one of those spam ads touting bulk e-mail services reaches Paulann Anderson, proprietor of JetMail in northern Maine.

"I'm a one-woman business," she explains. "About three years ago, I participated in one of those multilevel marketing letters [via e-mail]. I learned how to get things mailed out and, in talking to the bulk e-mailers, I got interested in it. Once I made money on it, I decided to go into the business full time."

Anderson's business is fairly straightforward. For just $89, she will electronically send a letter to 100,000 addresses - you write the letter and forward it to her, she takes care of the rest. For $165, your message goes to 200,000 people. Plus, on special this month, Anderson says, you get an additional 50,000 free mailings with every order. (The special does not apply to targeted mailing lists. The rate for shared demographic information is $250 for 100,000 addresses.)"Some people in this business make $30,000 a month," says James Whelan, CEO of a Canadian company called E-mail King and Associates. "They'll never make bulk e-mailing illegal. It's an effective means of marketing. I got 53 signups for a long-distance company [I was marketing for] in one week. Tell me that people don't like bulk e-mail. What gives it a bad name are the idiots who don't honour the 'remove-me' requests - and porn e-mail."

Whelan and Rasmus point out that people can reply and ask to be removed from their mailing lists. Other spammers, however, will forge their return addresses, so that when you hit reply, the message comes back to you. Still others direct you to a voice-mail box that's perpetually full. But the numbers are there in compliance with California, Washington and Virginia State laws that mandate such measures.

Rasmus claims ISPs aren't really upset about the traffic jams "bulk e-mailers" like himself create, but about the fact that e-mail marketing is an alternative to buying banner ads. Spam represents advertising revenue that the ISPs aren't getting. He insists this is why America Online has so aggressively sued spammers and lobbied for antispam legislation. He also alleges that AOL is considering starting its own commercial e-mail service - a claim that AOL denies.

Why you? At some point, you may have unwittingly asked for spam. When you check a box on a Web site registration form that says you'd like to get information on a topic, you've just "opted in", the term for agreeing to accept commercial e-mail. (Conversely, some Web sites consider you opted in if you neglect to check a box to specifically "opt out" of any promotional messages.)The site operator can then sell your address to a mailing-list broker, opening the floodgates and making you fair game for anyone who puts together targeted and untargeted lists for sale. ISPs do not sell their Web addresses, because ISPs don't want to contribute to the spamming of their own customers.

But, chances are, you're just receiving e-mail from out of the blue, without signing up for anything. If a spammer doesn't want to buy a list from a list broker, he can buy spidering software from one of several major vendors or thousands of resellers. Vendors tend to use large numbers of resellers, sometimes in pyramid-scheme arrangements, to confuse and complicate trails to the source. Using a technique similar to that used by a search engine, the spidering software will search newsgroups and the Web, looking for the tell-tale signs of an e-mail address: the @ symbol and .com, .edu or .org within the same string of characters.

While the technology for spamming is not very expensive - Anderson says that buying software and tools runs to about $1500 - it still may be easier to use a third party, because spamming, while legal, is still something of a covert activity. A spammer must subscribe to a bulk-friendly ISP and probably juggle several accounts. The more you can make it look like you're not hogging traffic, the better. ISPs get upset when someone causes an e-mail traffic jam, and they've been known to close down accounts or even sue.

Spam was born in the early '90s, when the Inter-net was the province of a small, polite community that took great pains to protect their lines of communication. Sanford Wallace and his company, CyberPromotions, broke the taboo. He signed on a bunch of clients with products to sell, dredged up a slew of addresses and blasted out marketing e-mail.

Ultimately, the company was hit with 13 lawsuits from ISPs angered by the traffic problems Wallace caused and the ill will he inspired in their customers. The company spent 1995 through 1998 in litigation, with at least three cases pending at any one time. Eight of the lawsuits resulted in expensive judgments against CyberPromotions, including one for $2 million; the combined damages were so costly that the company was effectively forced out of business.

Wallace claims the lawsuits were the best thing that ever happened to him, or the Internet. By acting as the fall guy, he says, he helped the nation figure out what constitutes ethical e-mail marketing and enact laws that prohibit unethical practices. "There were a lot of precedent-setting cases," he says. "With CyberPromotions, I thought, 'If it works in the real world, why not e-mail?' But it failed. I learned that on the Internet the rules change. You can't do things that people don't want."

America Online, the first to sue Wallace, has since filed over 40 suits against spammers, with 12 cases currently pending. While it might be less costly simply to close their accounts, AOL sues spammers in the hope that a hefty judgment will put them out of business. Causes of action can include copyright and trademark violations; trespassing; torts; violations of contracts; and violations of the Federal Computer Fraud and Abuse Act, which makes it illegal to use someone else's computer or network without their authorisation. "Our aim is to impose the real costs of spamming on the spammer," says Randall Boe, associate general counsel at AOL.

The AOL suit against Sanford Wallace started, in fact, with a Sanford Wallace suit against AOL. After getting stuck with a batch of undeliverable mail, one day AOL sent it all back to him. "It freaked him out," says Boe. "So he sued us, claiming that we sent him an e-mail bomb that was undeliverable. We counter-sued, and then we were off to the races."

AOL claimed that Wallace was clogging its pipelines with undeliverable mail and annoying customers with unwanted messages. Wallace claimed it was a violation of antitrust laws for AOL to block him from sending spam.

After pursuing direct e-mailers for a while, AOL tried a different tack. While still targeting people with something to sell, AOL started going after the makers of spam-ware, the software used to extract e-mail addresses and gush out messages in bulk. The com-pany is currently searching for the makers of Stealth E-mailer and Floodgate, software designed to evade an ISP's attempts to block out spam.

But finding spammers isn't always easy. A case in point: Vernon Hale operated Prime Data World Systems out of a mobile home in Kentucky. When he heard that AOL's legal department was after him, Boe says Hale simply drove off. But he kept calling AOL lawyers from the road, explaining that he was out of the spam business for good. "It was a cat-and-mouse game," recalls Boe. "I told him, 'We need to discuss this. Can I fax you some papers?' But he would not give us a fax number." AOL could not supply contact information for any of these defendants, so the stories could not be corroborated.

In another case, Boe says a spammer who phoned in to negotiate turned out to be a police officer calling from his department. The cop begged to end the suit, on any terms named by AOL, and a settlement was reached.

Another spam suit resulted in a literal swamp drama. After AOL handed legal papers to Gulf Coast Marketing of Louisiana, the two brothers who formed the company went berserk, says Boe. One announced to AOL that the other had dumped the company's computers in the swamp so they couldn't be used as evidence. The brother who dumped the computers ultimately cooperated, allegedly after the first brother ran off with his wife.

AOL lawyers will typically send a cease-and-desist letter before filing a suit. Another pair of brothers, Damien and Joe Melle, replied to the letter with a threat: they claimed to have 10 million AOL addresses on a CD-ROM, and they promised to release it for free to the entire world if AOL's attorneys didn't back down.

AOL didn't flinch. "The interesting aspect to that story was the Internet community's reaction to it," says Boe.

"There was a lot of anger over how these guys held e-mail addresses hostage. People sent the brothers death threats." AOL ultimately broke them; the Melle brothers claimed to be destitute, and each brother's case is proceeding separately.

A few states with strong antispam lobbies have enacted legislation against bulk e-mailers, most focusing on unsavoury tactics rather than on banning the practice outright. The law in Virginia, home state of AOL, effectively covers the majority of all online accounts because AOL holds the lion's share of Internet access, with the majority of all online accounts in the US. The state legislature just enacted the Virginia Computer Crime Act, which makes it illegal to falsify headers in e-mail and to distribute software primarily designed to falsify. Penalties are $15 per mail item, or $10,000 per business a day - enough to put a spammer out of business. The law went into effect on July 1.

Other state laws also tend to limit, rather than outlaw, spam, following the model used to wipe out fax advertising. Nevada and California, for instance, prohibit sending e-mail to people who haven't already expressed consent, or with whom the sender does not have a prior business relationship. Washington, like Virginia, bans the use of a forged return address or domain name.

Federal legislation is imminent. The challenge is to be neither too strict nor too lenient. "We don't want to begin down that slippery slope of regulating the Internet to death," says Representative Billy Tauzin, who chairs the House Telecommunications Subcommittee. "History has shown that once the Federal Government gets its foot in the door, they take over your house. The hackers and the spammers are always one step ahead of us no matter what we do. Plus, there are legitimate concerns when it comes to restricting e-mail. And enacting such a law requires striking a balance between those who want no laws on the Internet, and those who want complete bans of illicit practices."

Spammers are often creative with subject lines, using things like "Re: Your Web site", "Hi" and other familiar terms to trick people into reading e-mail.

Requiring honest subject lines would help ISPs and domain owners filter spam from their networks so consumers would never even see the stuff. Yet so far, few businesses have responded to the growing outcry against spam, except in a token manner. In March, for example, Earthonline, a leading e-mail-related software manufacturer discontinued GeoList Professional, a product that harvests e-mail addresses, because, they say, they were shocked - shocked! - to find that it was being used for spamming. Company officials sent out a letter to customers and resellers explaining that GeoList was intended to create targeted lists of e-mail addresses - that is, focusing on specific states or regions.

"We have had reports of customers using this product as a non-targeted spam-list-collection tool," the letter stated. "We do not condone or promote spam as a way to market products."

However, the company still offers around a dozen more products, including Nitro, a tool that extracts e-mail addresses from 28 different search engines, and DirectMail, which can divvy up an existing ISP account into 30 different e-mail addresses - a convenient way to camouflage an unseemly amount of outgoing e-mail. "It's a very lucrative service to get into," says Ken Bailey, sales manager for the company.

Spam won't disappear. It's cheap, and it works.

"Spam is with us for good," says Mike Saguri, cofounder of Grand Towers Online Casino. "Just like the junk mail at home I sort through each day to get to the real mail. The real reason spam will never go away is because it makes money."

Saguri sends out e-mail touting his virtual casino, but insists that it's not spam. "We at Grand Towers Casino discourage our webmasters from sending spam due to obvious reasons," he says, alluding to the fact that spam is considered unethical and unpopular. So he calls his missives "marketing e-mail", even though recipients do not ask to receive the messages.

"We would like to see some sort of mandatory law that if you send unsolicited e-mail, you should include a code at the top of your e-mail stating so. This way anyone could reject the e-mail if they wish," says Saguri.

"But so many webmasters realise that if they send out 100,000 e-mails per day, they will probably get 400 to 1000 cash responses per day. It's hard to understand why more businesses are not spamming the Net. Some of these advertisers are building small fortunes."

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