Spending several hours a day with a fax machine at your elbow is usually not an annoying situation, provided that you are the only person in the office and that the only time you ever receive a fax is when it’s spam.

Usually there is a removal number on junk faxes that you can call to get off their mailing list. Over the past few months, however, I have been getting a certain kind of fax spam here that does not have a removal number. What’s strange, though, is that I can’t figure out what the business model of the spammer is, because the company whose stock is being promoted has publicly denounced the spam and they are the victim of a third party spammer.

Below is the spam I received today from this third party spammer:

stockspam.jpg

The company being flakked is Pay88, Inc. They sell prepaid internet gaming and phone cards. They are not responsible for the spam, as they have stated recently:

Pay88, Inc. announced today that it has come to the attention of the Company that it is currently the victim of third-party stock spammers. As of July 14th, third-party spammers disseminated an untold number of spam emails promoting the company without the company’s knowledge. The Company did not send or authorize any such messages nor did it authorize any of the parties disseminating such information

Because I’m the curious sort, and because spam really pisses me off, I’ve done some digging about the spammer (as much as I can without forking over $14.95 or more for a detailed report).

My fax machine reports that the number the spam came from is (678) 369-6703. The phone number is unlisted, but the area code is Atlanta, GA here in the United States. I’ve gotten other stock spam (for a company called Fire Mountain Beverage Co.) from a spammer using the same type of header that this fax has. That phone number was (214) 377-0512, which is in Dallas, TX. (Fire Mountain, by the way, has also publicly denounced this spam).

Who is sending these stock spam faxes? More importantly, what is their business model? There is no identifying information on the fax, no removal number (which is a huge Federal no-no), and no redirect (such as a website that the spammer might own and thus profit from).

This makes no logical sense…unless one concludes that the companies in question are lying and that they did, in fact, pay someone to spam their stock. That’s the only profit model that I can see here. That makes these two companies not only liars, but violators of Federal law on unsolicited advertising and Securities fraud. If it is true, I hope the SEC and the FTC come down on them like the Hammer of Thor for being such assholes.

Resources:

US Federal Trade Commission on advertising: Consumer Policy Issues

Spamnation tracks unsolicited emails and is a good clearinghouse for this sort of thing. Note that this is a .info domain. If you try to go to .com or .org versions of this URL, you’ll get the wrong stuff.

WhoCalledUs will help you figure out who is behind mysterious phone calls you are getting. It was through this site that I figured out that Sprint itself was responsible for obnoxious random phone calls I was getting on my cell phone.

5 Responses to “Stock Spam: What's the Profit Model?”
  1. Ian says:

    You make money on stock fax spam the same way as on email spam. http://spamnation.info/stocks/FAQ.html

  2. Sean T. McBeth says:

    Who would stand to profit from this? Easy, anyone who owns a large amount of that company’s stock. They don’t need to be colluding with the company to profit from it. This is just a new face on an old problem.

  3. Sam McBeth says:

    It is called a ‘pump and dump’. Hype a stock you own, others jump on board, you sell after it goes up, the others lose their shirts, because there was nothing behind your hype. Classic. All the rage during the internet bubble. Illegal.

  4. wanderer says:

    Not only do the companies whose stock is being “hyped” not profit from these activities, many of them are destroyed by these scams. As others have mentioned, it is an old scam, and it has been perpetrated by various means over the years. The scammers buy a bunch of “penny stock” in some unsuspecting small company, hype it to a bunch of greedy idiots who then run the price up, and as the price runs up, the scammers take a tidy profit. When the stock price collapses the small company has lost its reputation, stock value, and ability to survive. Some really good “up and coming” small companies, many of them family businesses that went public to raise capital, have been destroyed this way, and many lives have been ruined. Perhaps you should revise your post to reflect the fact that the companies whose stock is being touted are tragic victims, not perpetrators.

  5. Stock Spam says:

    Always make sure to pull up the stock spam report for any stocks before investing.

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