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!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags governmentsecurityregulationlegalantispamU.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

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?