I have a problem where I am receiving reports from my ISP about torrents being downloaded when I am not downloading them. You can read more details at my Hidden Torrent Programs? thread. While thinking about the problem, an idea occurred to me. What if there is a torrent client that allows you to lie about your IP address to the swarm.

I know there are programs that claim to hide your IP (a la Hide-My-IP.com), but all they are doing (as far as I can tell) is provide a paid anonymous proxy service. This wouldn't solve my problem of people using my IP to download torrents. So there must be something more involved.

Going back to my initial idea, what if you could lie about your IP to the swarm? As far as I know, you don't have to be honest about your IP on the swarm since firewalled connections can still transfer data. So, is this possible? Can a client lie about its IP and still download data? Could someone be using my IP to jump on a swarm and download while giving me the legal problems?

+++++ Update +++++
After searching around for a bit, I found out that my idea isn't so crazy. If you read Tweaking your system to get the most out of BitTorrent, you will find that you can give the official BitTorrent client a command as follows: Notice that you can tell the client exactly what to report as the IP address. This means that if my internet connection is through Comcast, and I want to download copyrighted content, all I have to do is lie about my IP. I could chose an IP that's in a different ISP's control so there's no way that I'd be suspected!

Big problem here though. What about those of us that aren't downloading copyrighted content and want to exonerate ourselves when wrongly accused? How could we possibly protect ourselves?

So is your ISP annoyed about someone pirating with your IP or just generally that they are using bittorrent?