Spam judgment not covered by insurance

Earlier this month a judge ruled that two insurance policies held by Scott Richter’s Media Breakaway were not liable to pay $6M in damages awarded in a previous case.
Myspace initially sued Media Breakaway in 2007 for allegedly using phished Myspace accounts to send emails advertising Media Breakaway websites. In summer 2008 and arbiter ruled in favor of Myspace and against Media Breakaway. After the ruling, Media Breakaway attempted to have insurance cover the fine. The insurance company denied the claims so Media Breakaway took them to court. Media Breakaway lost.
Scott has been around in the email marketing arena for a very long time. He’s had multiple run ins with the law, including a 2003 felony theft charge for stealing a number of things, including a Bobcat loader and a 2004 suit brought against him by the NY Attorney General’s office and Microsoft for spamming and deceptive advertising. That court case bankrupted his previous company, OptInRealBig. Scott has also appeared on the Daily Show, in a side-splittingly funny story about spam and email marketing…. er… high volume email deploying.

The Daily Show With Jon StewartMon – Thurs 11p / 10c
Email Trouble
www.thedailyshow.com
Daily Show
Full Episodes		Political HumorJoke of the Day

Have a great weekend all. It looks like I’m going to get the blog carnival post out Wednesday or Thursday next week so if you have a late entry feel free to drop it to me before then.
HT: Venkat

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One example of this is Ken Magill’s ongoing series of reports about EmailAppenders.
Aug 5, 2008 Ouch: A List-Purchase Nighmare
Sept 9, 2008 Umm… About EmailAppenders’ NYC Office
Sept 15, 2008 E-mail Appending Plot Thickens
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Mar 10, 2009 Another Bogus E-mail List Claimed
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Their actions, chronicled in his posts, are exactly what I see list providers, list brokers and “affiliate marketers” do every day. They hide, they lie, they cheat and they obfuscate. When someone finally decides to sue, they dissolve one company and start another. Every new article demonstrates what spammers do in order to stay one step ahead of their victims.
While Ken has chronicled one example of this, there are dozens of similar scammers. Many of them don’t have a persistent reporter documenting all the company changes, so normal due diligence searches fail to turn up any of the truth. Companies looking for affiliates or list sources often fall victim to scammers and spammers, and suffer delivery and reputation problems as a result.
Companies that insist on using list sellers, lead generation companies and affilates must protect themselves from these sorts of scammers. Due diligence can be a challenge, because of the many names, domains and businesses these companies hide behind. Those tasked with investigating affiliates, address sources or or mailing partners can use some of the same investigative techniques Ken did to identify potential problems.

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Number of people believing outrageous statements on the Internet
(Image from Bad Astronomy)
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