Yahoo Wins $610 Million Judgment in 2008 Lawsuit Against Spammers

 
 
By Fahmida Y. Rashid  |  Posted 2011-12-08 Email Print this article Print
 
 
 
 
 
 
 

A judge ruled in favor of Yahoo and awarded $610 million in damages in a lawsuit against spammers who promised victims lottery prizes in exchange for personal information. But Yahoo is unlikely to collect even a penny of the award.

A judge told the group of spammers who tricked users into thinking they'd won a prize in a fake lottery to pay Yahoo $610 million in damages for using the Web company's name in the scam.

Yahoo filed a lawsuit in 2008 against a group of scammers accusing them of running a spam campaign in which emails were "unlawfully sent to Internet users with the intent of deceiving them into believing they had won a lottery prize offered by Yahoo."

More than 11.7 million hoax lottery emails were sent between December 2006 and May 2009, and the groups' goal was to trick recipients into providing their personal and financial data, such as credit card information and Social Security numbers, Yahoo alleged in the complaint. The information was used to commit fraud, such as stealing funds from bank accounts and applying for loans and credit cards, or sold to other criminals, according to the company.

Yahoo's allegations were "uncontroverted," Judge Laura Taylor Swain of the United States District Court for the Southern District of New York ruled on Dec. 5. The judge found the "defaulting defendants jointly and severally liable as participants in a conspiracy under New York common law," Yahoo said.

Yahoo was entitled to $27 million in statutory damages for trademark infringement and $583 million in statutory damages for violation of the federal CAN-SPAM act, the judge ruled.

Yahoo is not the only company to have sued spammers, but considering how hard it is to find the perpetrators, it's unlikely that Yahoo will ever actually receive any of the money it has been awarded. The defendants, individuals from Thailand and Nigeria and corporations based in Taiwan and Nigeria, never responded to Yahoo's complaint.

"Defendants have never responded in this action or appeared before the Court, much less cooperated with the Court," the judge wrote in her decision.

Yahoo claimed it hadn't pursued the lawsuit for the money, but to protect its name. "Yahoo takes the protection of its users and its brand very seriously. Our ultimate goal is to ensure that users continue to trust Yahoo as the leading U.S. email provider," said Christian Dowell, the company's legal director of globe brand protection.

While spam continues to be a problem, Symantec's November Intelligence Report found that email spam volumes worldwide have dropped and are close to a three-year low. Email spam accounted for 70.5 percent of all messages sent in November, which is a dramatic drop from 2009, when 90 percent of email sent that year was spam.

Other companies who've won lawsuits against spammers have not received the damages due them. Social-networking site MySpace filed several lawsuits against spammers and won, as did Facebook. Sanford Wallace, who formed Cyber Promotions in 1995 and was nicknamed "Spamford," was sued by both MySpace and Facebook for spamming and phishing users on the social-networking sites in 2008 and 2009.

Judgments from those cases totaled nearly $950 million in damages, but Wallace filed for bankruptcy shortly after the cases were decided. Wallace surrendered to the FBI Aug. 4 after a federal grand jury indicted him in July on various counts of electronic mail fraud, intentional damage to a protected computer and criminal contempt. Wallace could serve anywhere from 16 to 40 years in prison, and pay up to $2 million in fines if convicted on all counts.

 


 
 
 
 
 
 
 
 
 
 
 

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