The Spammer Next Door

Rathbun came to know a lot about Nadine. He took notice of the name because of all the crap addressed to nadine@honet.com in his bad-message sump. The real Nadine, Rathbun gathered, had entered a sweepstakes site hosted by a company called DeliverE.com. When she registered, Nadine presumably checked a privacy agreement that allowed DeliverE.com to sell her name to anyone with a buck and a modem.

DeliverE.com should have received a "no such user" message from Rathbun's server, but that hardly mattered. The offers came pouring in. From Harris Polls, SmarterKids.com, Webstakes.com, AT&T.

And from Virtumundo.

Rathbun attempted to contact the bulk e-mailers who pelted Nadine with ads. (Rathbun tells the full story at www.honet.com/nadine. One entry's partial title: "We Believe in You, Even If You Don't.") Many bulk e-mailers don't want to be found. Yet Virtumundo provided enough information about itself in its "Receive great offers!" e-mail that Rathbun was able to direct an e-mail to the company's CEO. "I dropped Scott Lynn a note and said, 'Are you guys really trying to go out of business in style, or what's your plan here?'" Rathbun tells the Pitch.

Rathbun was surprised when Lynn followed up with a phone call. Lynn, Rathbun says, even suggested there might be a job for him at Virtumundo. "That depends on how much advice you want to take," Rathbun says he replied.

Rathbun drove to Kansas City and addressed Lynn and key Virtumundo staff. (Rathbun treated the trip like a sales call and paid his own way. He says he billed Virtumundo for consulting on later occasions.) "I was explaining to them that there was no possible way on earth that Nadine could have signed up and given permission, because Nadine doesn't exist. It all comes to me, and I didn't sign up for it."

Rathbun suggested a way for Virtumundo to avoid future Nadines: Ask new users to confirm their existence and their desire to receive advertising (a mechanism known in the business as a "double opt-in"). Otherwise, spam critics say, consent gleaned from co-registrations and the like is flimsy. "Typically, permission means that someone typed the address into a Web form somewhere," Levine says. "So if I type your address into one of their Web forms, you opted in -- surprise!"

Virtumundo executives passed on Rathbun's recommendation.

"They just basically said, 'That's just too marginal a problem for us to worry about,'" Rathbun says. "They felt that if an address was obtained under the aegis of a privacy policy that says 'I agree to receive stuff from your marketing partners,' they felt that meant they could make free use of it, since the seller of the list had the right to sell the list."

Rathbun maintains that because such lists are sold freely, users essentially agree to receive e-mail from anybody on earth. "And nobody in their right mind wants that," he says. "You're not really giving informed consent."

Virtumundo gives users a chance to opt out of its list. The introductory "Receive great offers!" e-mail sent to Nadine provided a link that would have allowed her to unsubscribe. But such "confirmation" e-mails seem to exist for the benefit of lawyers more than for consumers. Only one user in twenty even opens such messages. And many spam fighters warn against unsubscribing because it tells unscrupulous e-mailers that a warm body uses the address.

Lynn says Virtumundo experimented with seeking a more affirmative form of consent a few years ago, but it only confused users. "This is your average, general Internet demographic that has a difficult time checking their e-mail, let alone figuring out how to use a double opt-in, so we stayed away from it."

Virtumundo, he says, honors requests to unsubscribe. AOL now makes the process as easy as a click of a button, he adds. "Relationships have been struck with several ISPs to make sure that if users are complaining or don't want to receive the mail, we immediately remove them from the list."

Lynn says Virtumundo is always revising its policies. The company, he adds, no longer buys databases of names the way it did in the past. In fact, in 2002, Virtumundo filed a lawsuit against the outfit that provided Nadine's name.

In the lawsuit, Virtumundo accused two California-based companies, Mindset and Inurv, of selling tainted data. According to depositions, after Virtumundo began contacting Mindset's and Inurv's names, users flooded ISPs and anti-spam organizations with complaints. "As a result, Virtumundo was notified that it would be publicly listed as an offender in that industry, i.e., as what is commonly referred to as a 'spammer,'" the lawsuit alleged.

The bad rep, Virtumundo alleged, lost the company clients and tried the patience of ISPs.

But in a countersuit, Mindset and Inurv suggested that Virtumundo's shoes were too muddy for it to mount a white horse. They said Virtumundo soured the database by barraging the addresses with as many as five messages a day. Furthermore, Virtumundo's "reputation as a spammer in the industry" preceded the contract.