Spam a Lot, Pay a Lot
In the exciting world of online marketing, it takes plenty of everything — millions of e-mail addresses, lots of bandwidth, endless diet pills, stock tips, porn sites, ringtones, chutzpah and moxie — to succeed. And if it also takes a few million bucks here and there to settle with unhappy customers, that's just the cost of doing business. Especially if you happen to be the wizard of Westminster, the huckster of cyberhype, the sporozoan of MySpace, the spalpeen of spam: the one and only Scott Richter.
A few years ago Richter's Westminster-based company, OptInRealBig, was identified by online activists as the third-largest source of unsolicited e-mail in the world. One of the few spammers to publicly defend his operation, Richter preferred the term "bulk e-mail marketer" and insisted that the recipients of his annoying come-ons had "opted in" to receive commercial offers, whether they knew it or not. But Microsoft and New York's attorney general (future and now-ex-governor Eliot Spitzer) were vowing to shut him down when we profiled Richter in 2004 in "Mr. Spam Man."
Richter ended up settling with Spitzer for a mere $50,000 and then shelled out another $7 million to Microsoft. OptInRealBig changed its name to Media Breakaway, and Richter insisted the new company was keeping things strictly legit. Even his harshest critics agreed that Richter was no longer a spam king.
But in the hectic hurly-burly of bulk e-mailing, it's possible to take a licking and keep on phishing. Last year MySpace sued Media Breakaway, claiming the company had stolen members' sign-on info and used it to spam them repeatedly. Richter blamed the bad behavior on subcontractors -- which, come to think of it, is what he said after Microsoft complained about thousands of unsolicited OptInRealBig e-mails sent from hijacked servers to Hotmail accounts.
On June 16, Richter settled with MySpace for $6 million. His attorney, who also happens to be his dad, says the company has boosted its number of legal compliance officers and is working to prevent any further problems. But Richter's involvement in the ringtone business —offering "free" ringtones that turn out to carry a monthly subscription fee — continues to attract media scrutiny, including a CBS News report earlier this year. -- Alan Prendergast
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