Accused text-message spammers to pay $9 million in settlement

The group of companies promised free gift cards and electronics, but required phone owners to jump through several hoops

A group of companies that allegedly promised mobile phone users supposedly free gift cards and electronic devices in a "massive" text-messaging spam operation will pay more than US$9 million to settle complaints from the U.S. Federal Trade Commission.

Many of the unwanted text messages promised free merchandise, including $1,000 gift cards to large retailers or Apple iPads, the FTC said this Wednesday in a press release. After mobile phone users clicked on links, many then received illegal robocalls or unauthorized charges on their mobile phone bills, the agency said.

The text messages contained links to websites that led consumers through a process designed to get consumers' personal information for sale to marketers and to drive them to paid subscriptions for which the defendants received affiliate referral fees, the FTC alleged.

Mobile phone users who clicked on links were often required to complete 13 steps, including signing up to pay for new services and disclosing their job status, income, credit score and medical conditions, before moving ahead with the offers, the FTC said in a complaint filed in an Illinois court. In many cases, people who started the process abandoned it because of the time or cost involved, the FTC alleged.

In most or all cases, it was "impossible for a consumer to qualify for the promised free merchandise" without spending additional money, the FTC said in its complaint.

While the texting campaign promised free items, "the costs to consumers were very real," including unwanted charges crammed onto their phone bills, Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement.

Some of the companies named in the FTC's original July 2013 complaint appeared to be out of business and unavailable for comment.

The settlement covers three groups of defendants.

The first set of defendants, required to pay the FTC $7.8 million, was responsible for sending millions of illegal text messages, and making deceptive claims about "free" merchandise, the FTC alleged. The settlement bans these defendants from sending unwanted text messages and placing any charges on people's telephone bills.

The defendants in this group include Acquinity Interactive, based in Florida; 7657030 Canada; and Revenue Path E-Consulting of India.

The second set of defendants is required to pay the FTC $1.4 million. This group of defendants was responsible for cramming unauthorized charges on consumers' mobile phone bills, the agency alleged. This group includes Polling Associates Boomerang International.

In the third settlement, an $8 million judgment is being suspended due to the defendants' inability to pay, the FTC said. This group was responsible for making millions of illegal robocalls, the agency alleged.

These defendants are required to pay the FTC $100,000, as well as surrender the value of a life insurance policy and proceeds from the sale of a 2013 Cadillac Escalade, two motorcycles, and a real estate holding in Southern California. These defendants include Firebrand Group and Worldwide Commerce Associates, both based in Nevada.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags regulationlegalantispamU.S. Federal Trade CommissionCivil lawsuitsJessica Rich

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?