Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC files complaint against email spammer for allegedly tricking consumers with false information about Affordable Care Act, (Jan 23, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC announced today that it is taking action against a website operator that allegedly deceived consumers – in advance of the roll-out of provisions of the Affordable Care Act (ACA) – with unsolicited commercial 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 (FTC v. Kobeni, Inc., File No.132-3273).

The complaint against Kobeni, Inc. and its president, Yair Shalev, is the first the FTC has brought charging fraud relating to the ACA. 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;” and “You Must Select One of These 5 Options.”

According to 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. However, 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.

The complaint, filed in the U.S. District Court for the Southern District of Florida on January 21, seeks injunctive relief, restitution, and disgorgement of ill-gotten monies, among other relief.

Companies: Kobeni, Inc.

News: ConsumerProtection FederalTradeCommissionNews