• by Wendy Davis  @wendyndavis, October 12, 2004

Accused spammer DC Enterprises agreed last week to pay a relatively paltry $25,000 to settle a case brought in June by Massachusetts state Attorney General Tom Reilly. The company also agreed to refrain from violating anti-spam laws in the future.

DC Enterprises, owned by William C. Carson of Weston, Fla., was accused of sending out thousands of unsolicited emails promoting low-interest mortgages. The emails allegedly violated the federal Can-Spam Act and the Massachusetts Consumer Protection Act because they lacked provisions allowing consumers to get off the sender's mailing list, lacked valid return addresses, and didn't clearly state they were ads.

But, despite the technical victory for the state attorney general, not everyone thinks a $25,000 fine sends a strong enough message to illegal spammers.

"Twenty-five thousand dollars is a drop in the bucket compared to some of the revenue that's being generated," said Bill McCloskey, CEO of Emerging Interest, a New York-based digital marketing technology company. He estimates that e-mail marketers make millions in revenues. "It's a very high-margin, very lucrative industry," he said.

The reason for spam's success, he said, is because many recipients buy the product being marketed. "It's very effective," he said. "That's why you receive so much of it."

The case against DC Enterprises is only one of several recent high-profile actions to rein in alleged spammers. For instance, last year New York Attorney General Eliot Spitzer and Microsoft Corp. filed an $18 million suit against Westminster, Colo.-based OptInRealBig.com, New York-based Synergy 6 Inc., and Plano, Texas-based Delta Seven Communications LLC for allegedly violating anti-spam laws.

In July, OptInRealBig.com settled with Spitzer for just $50,000, and without admitting wrongdoing. Steve Richter, the company's lawyer and the father of its owner Scott Richter, said OptIn only agreed to the fine to end the case quickly. "We settled for the sole purpose of bringing it to closure," said Richter. "It would have cost 10 times that amount if it was litigated." The Microsoft portion of the suit against OptIn is still pending.