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According to FTC, an Internet operator used auction houses to "sell" computers and musical equipment that he never delivered. Morgan Engle recently agreed to settle FTC charges that he violated federal laws. The settlement bars Engle from:

selling goods or services via Internet auctions for life;

making misrepresentations in the sale of goods or services; and from violating the FTC's Mail Order Rule.

Under the settlement, he agreed to post a $35,000 performance bond before engaging in telemarketing and to pay $5,820 for consumer redress.

In April 2003, FTC targeted Morgan Engle as part of Operation Bidder Beware, a law enforcement crackdown by FTC and 29 state Attorneys General targeting Internet auction fraud. That initiative resulted in 57 criminal and civil law enforcement actions and a related consumer education campaign. Auction fraud is the single largest category of Internet-related complaints in FTC;s Consumer Sentinel database, which logged over 51,000 auction complaints in 2002.

FTC filed suit against Engle in U. S. District Court in Atlanta. FTC charged that he advertised computers and musical instruments and equipment for sale on various Internet auction sites. As the bidding progressed, he sometimes circumvented the auction house process by e-mailing consumers or telephoning them to encourage the purchase and discuss payment terms and delivery details. But he rarely delivered the goods and rarely provided refunds, according to FTC.

NOTE: This stipulated final judgment and order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

(Morgan Engle, FTC File No. X03 0041, Civil Action No. 1:03-CV-1072-JEC, October 23, 2003.)


The Commission has approved the release of FTC's Strategic Plan for Fiscal Years 2003-2008, as required under the Government Performance and Results Act (GPRA) and through guidance issued by the Office of Management and Budget. Every three years, each government agency must prepare and submit an updated strategic plan regarding its program activities that covers at least the following five years. FTC's last updated strategic plan was prepared in FY 2000.

The Strategic Plan for Fiscal Years 2003-2008 first presents an overview of the FTC's history and current activities, future goals, objectives, strategies, and performance measures for the next five years. It then details how the Commission will implement the plan in the areas of consumer protection and maintaining competition on an objective-by-objective basis. Finally, it includes a summary of the laws enforced by FTC and an overview of the key components of FTC.

FTC's vote to approve and issue the plan was 5-0. It's available on FTC's Web site at

(FTC's Strategic Plan for Fiscal Years 2003-2008, FTC File No. P961201, October 3, 2003.)


On October 30, 2003, FTC told the House Committee on Small Business that solving the problem posed by spam won't be quick or easy and that a single approach won't provide a cure. In testimony before the Subcommittee on Regulatory Reform and Oversight, Howard Beales, Director of FTC's Bureau of Consumer Protection, said the spam problem will require a blend of technology, enforcement, legislation, and consumer and business education. "Any solution to the problems caused by spam should contain the following elements: enhanced enforcement tools to combat fraud and deception; support for the development and deployment of technological tools to fight spam; enhanced business and consumer education; and the study of business methods to reduce the volume of spam."

FTC has set up a Federal/State Spam Task Force to strengthen cooperation with civil and criminal enforcers and to help overcome some of the obstacles that spam prosecutions present. The Task Force members can share information obtained in spam investigations and "apprise participating agencies of the latest spamming technology, spammer ploys, and investigational techniques," according to the testimony.

While the Commission has pursued a rigorous law enforcement effort targeting deceptive spammers and has brought 55 cases to date, locating spammers is a challenge for all law enforcers, the testimony says. "Spammers can easily hide their identity, falsify the electronic path of their e-mail messages, or send their messages from anywhere in the world . . ."

The testimony notes that FTC has called for certain legislation to enhance its FTC's ability to fight fraudulent spam. "First, legislation must address how to find the person sending the spam messages . . . Second, legislation must deal with how to deter the person sending the spam messages . . . Finally, legislation must determine what standards will govern non-deceptive, unsolicited commercial e-mail."

(Prepared Statement of the Federal Trade Commission on "Unsolicited Commercial Email," Presented by J. Howard Beales, III, Before the Subcommittee On Regulatory Reform and Oversight of the Committee On Small Business, United States House of Representatives, FTC File No. P00 4101, October 30, 2003.)
















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