A company accused of sending unsolicited and deceptive email before the roll out of the U.S. Affordable Care Act will pay US$350,000 to settle a complaint from the U.S. Federal Trade Commission.
The FTC accused Yair Shalev and his Florida-based company, Kobeni, of sending spam email that falsely claimed recipients would be violating the Affordable Care Act, often called Obamacare, if they did not immediately click a link to buy health insurance.
The FTC in January filed a complaint against the company in U.S. District Court for the Southern District of Florida. The agency alleged that the emails violated the unfair business practices section of the U.S. FTC Act.
The unsolicited email also violated the antispam CAN-SPAM Act by failing to provide recipients the opportunity to opt out of future emails and failing to provide a valid physical postal address, the FTC said in a press release.
The defendants' emails led to websites with advertisements for insurance, the agency said, and the websites paid the defendants when consumers clicked links in the ads. Insurance companies whose ads appeared on the websites did not authorize the email messages, the FTC said.
"Today is the deadline to make your election or be in violation of federal law," one email allegedly sent by the defendants said. "[We] must receive your election or you will be in violation of federal law. You will be in violation and face penalties if you do not elect."
A lawyer representing Shalev and Kobeni in the FTC complaint wasn't immediately available for comment.
In addition to the $350,000 judgment, the settlement order prohibits the defendants from misrepresenting facts about any product or service, including health insurance.
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is firstname.lastname@example.org.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.