Sophos: Legal victory against spammers as Myspace wins record payout of USD 234 Million
May 2008 by Sophos
IT security and control firm Sophos has applauded a legal judgment that has awarded MySpace a record payment of USD 234 million (UKP 121 million) from spammers who bombarded its users with junk emails.
The payout, the largest ever under the US CAN-SPAM Act, means that Sanford "Spamford" Wallace and his business partner Walter Rines are obliged to refund the social networking website for the cost of handling 700,000 junk messages, and complaints it received from its users.
The duo created MySpace accounts and stole passwords through phishing to comandeer existing accounts to send their spam messages. The spammers made money through advertising and selling of goods such as ringtones.
"The judgment against the spammers is astronomical, because under the terms of the CAN-SPAM law each spam message entitles MySpace to USD 100 in damages. In the war against spam it is right that large companies should have a heavy stick like this to hit the spammers with," said Graham Cluley, senior technology consultant for Sophos. "What is galling however is that these two spammers are just the tip of an iceberg. Even if MySpace were to extricate the fine from these two men - which seems unlikely given their past record - there will be plenty more cybercriminals trying to make money from junk email."
MySpace told the Los Angeles District Court judge Audrey B Collins that some of the spam distributed by Wallace and Rines - much of it sent to teenagers - included links to third party websites containing pornographic material.
Judge Collins also issued injunctions against Wallace and Rines barring them from similar activities in the future. Wallace and Rines failed to attend the court hearing.
Sophos notes that this is not the first time that Sanford Wallace has been on the receiving end of legal activity for his cybercriminal activities. In the 1990s, CompuServe and AOL sued Wallace for sending millions of junk emails, and in 2006 he was fined USD four million for installing spyware onto innocent users’ computers.
"It would be great to think that this is the last we will see of ’Spamford’ Wallace’s internet activities, but I don’t have much hope that even with this colossal fine he will be able to resist abusing innocent net users again," continued Cluley. "The simple fact is that spam works. Until people pledge not to click on links in unsolicited emails and never to buy goods sold via spam, there will still be lowlifes like Wallace and Rines trying to fill our inboxes."