Huge Fine Leveled in Internet Spam Case

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A judge in Iowa orders a spam distributor to pay $11 billion in damages to the owner of an Internet service provider who was deluged with unwanted e-mail. But no one actually expects the spammer to pay up.


This is DAY TO DAY. I'm Madeleine Brand.

We're going to spend the next several minutes on technology, specifically how it's being used to change advertising and journalism. First, advertising. You know those annoying and illegal spam messages in your e-mail? Well, a federal judge has ordered a spammer to pay a small Internet service provider in Iowa more than $11 billion. NPR's Ted Robbins says the idea is not to collect all the money but to shut down illegal spammers.

TED ROBBINS reporting:

If you were in the business of delivering e-mail, you sometimes have to block thousands of illegal, unsolicited, commercial messages, spam, just to deliver one legitimate e-mail and that ticks off Robert Kramer.

Mr. ROBERT KRAMER (Internet Provider): We need to knock these guys down one at a time and we need to spread the word to other spammers that you're not going to get away with it, and if you get caught, the penalties are severe.

ROBBINS: Robert Kramer provides Internet service for about 5,000 customers in Iowa and Illinois. A couple of years ago, a flood of spam advertising mortgages and debt consolidation shut down his servers. A federal judge recently ordered the spammer, James McCalla, of Florida, to pay Kramer $11.2 billion. The award comes a year after the same judge ordered two other spammers to pay Kramer $1 billion. Kramer has not yet collected on that and his attorney, Kelly Wallace(ph), doesn't expect to see $1 billion much less $11 billion.

Mr. KELLY WALLACE (Attorney): I don't think Mr. McCalla has $11 billion. But, you know, we are aware that Mr. McCalla is a professional spammer. He make a good bit of money. He makes more money than I do as an attorney.

ROBBINS: We tried to reach James McCalla, unsuccessfully, but Kelly Wallace says he's hiring a collection attorney to track down the defendant in Florida and seize his assets. And that may be the real effect of court cases like this one, putting illegal spammers out of business. Eileen Harrington of the Federal Trade Commission.

Ms. EILEEN HARRINGTON (Federal Trade Commission): This guy now has an $11.2 billion judgment hanging over his head. That is a judgment that can be reported and appear on his credit record. It likely will have a significant impact on his ability to obtain financing and credit.

ROBBINS: The judge in the case also ordered James McCalla not to do business on the Internet for three years. If he violates that order, he could be held in criminal contempt. John Mozena of CAUCE, the Coalition Against Unsolicited Commercial E-mail, says more frequent judgment would be more helpful than large judgments.

Mr. JOHN MOZENA (Coalition Against Unsolicited Commercial E-mail): We would much rather see a lot more smaller cases against spammers than the maybe once a month large cases against spammers that we have right now.

ROBBINS: Now US law only prohibits some spam, misleading or untrackable spam or spam you can't unsubscribe from. So John Mozena says shutting down illegal spammers won't clear out your in-box by itself.

Mr. MOZENA: You know, we're happy it happened. We're happy the plaintiff won. But, you know, in terms of actually cutting down on the amount of spam you're going to see in your in-box tomorrow morning or next month, no.

ROBBINS: But according to FTC research, there are effective ways to cut down spam, if people use them: virus protection, anti-spyware and anti-adware programs, also spam filters provided by Internet service providers. Robert Kramer in Iowa says he spent a lot of money putting them in place for his customers and he swears he'll at least get that money back from spammers some day.

Ted Robbins, NPR News.

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