UPDATE August 12, 2014
An email spammer and his company will pay $350,000 to resolve Federal Trade Commission charges that they sent deceptive emails in advance of the Affordable Care Act (ACA) roll-out, falsely claiming that consumers would be violating the law if they did not immediately click a link to enroll in health insurance.
In January 2014, the FTC filed a complaint against Yair Shalev and Kobeni Inc., alleging that their misrepresentations violated Section 5 of the FTC Act. It also alleged that their spam emails violated the CAN-SPAM Act by failing to provide consumers the opportunity to decline to receive future emails, and to provide a valid physical postal address.
According to the complaint, the defendants' emails led to websites with advertisements for insurance. The websites' operators 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 settlement order imposes a $350,000 judgment and permanently prohibits the defendants from misrepresenting material facts about any product or service, including that consumers will violate federal law if they do not select health insurance by a certain date, or that the law requires consumers to buy something. The order also bars the defendants from violating the CAN-SPAM Act, including by engaging in the violations that occurred in this action.
The U.S. District Court for the Southern District of Florida entered the order on August 7, 2014.
As of January 23, 2014, FTC Matter/File Number:
132 3273, Federal Court, Southern District of Florida Case 0:14-cv-60143-XXXX, was filed in the United States District Court - Southern District of Florida by the Federal Trade Commission, against a website operator that allegedly tricked consumers - in advance of the roll-out of the Affordable Care Act (ACA) - with spam emails that falsely claimed that consumers would be violating the ACA if they did not immediately click a link to enroll in health insurance.
The case against Kobeni Inc. and its president, Yair Shalev, is the first the agency has brought alleging ACA-related fraud.
According to the FTC's complaint, from at least May 2013 through August 2013, the defendants sent consumers email with statements such as:
"Today is the deadline to make your election or be in violation of federal law
Must Receive Your Election Or You Will Be In Violation of Federal Law.
Effective Monday (08-05-13) health coverage is REQUIRED BY LAW.
Why is this mandatory? New Federal Law signed by the President made it mandatory for all U.S. residents to have active coverage. You will be in violation and face penalties if you do not elect.
You Must Select One of These 5 Options"
As stated in the complaint, links in the email messages led to websites with advertisements for insurance. The websites' operators paid the defendants when consumers clicked links contained in the ads. Insurance companies whose ads appeared on the websites did not authorize the email messages.
The FTC charges the defendants with violating the FTC Act by falsely representing that consumers would violate federal law if they did not select health insurance by the dates that appeared in their email messages.
The complaint alleges that the defendants violated the CAN-SPAM Act by not providing consumers who received the spam email messages with a clear and conspicuous notice that they had the right to opt out of receiving future commercial email messages from the defendants, and by sending commercial email messages that did not include the sender's physical postal address.
For further assistance please contact
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: (202) 326-2222