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March 17th, 2008

ValueClick to Pay $2.9 Million in Spam Case

According to a government agency, online advertiser ValueClick Inc. will pay $2.9 million to settle charges that it made deceptive claims in e-mails and online advertisements.

Westlake Village, Calif.-based ValueClick had said last month it would pay the fine to settle the matter, without admitting that it violated any laws. The company said in February that it took a $2.9 million charge against fourth-quarter earnings to account for the settlement.

The FTC also charged that ValueClick did not adequately protect its customers’ sensitive financial information, even though it claimed to protect such data using encryption. The company agreed to create a comprehensive online security program and get third-party assessments of it for 20 years as part of the settlement.

ValueClick’s Hi-Speed Media subsidiary violated the anti-spam act, the FTC alleged, by sending spam e-mail that offered consumers ”free gifts” to lure consumers to ValueClick’s Web sites. Consumers then learned that they had to purchase satellite television subscriptions, obtain car loans or buy other expensive products or services in order to obtain the gifts, the FTC alleged.

ValueClick said last month that ”the settlement is based solely on the past practices” of the Hi-Speed Media division, and added that it has reached agreement with the FTC on standards for its lead-generation business.

The fine is the largest ever imposed for a violation of the federal CAN-SPAM Act, the Federal Trade Commission said. The act, approved by Congress in 2003, bars deceptive practices in e-mail advertising.
Shares of ValueClick fell 90 cents (5%), to $16.57 in midday trading. The company has traded between $16.24 and $36.70 in the past year.

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