DECEPTIVE SPAM MESSAGE SENDER SETTLES FTC CHARGES

FROM:  FEDERAL TRADE COMMISSION 

Marketer Settles FTC Charges He Sent Millions of Deceptive, Unwanted Text Messages

An affiliate marketer has agreed to settle Federal Trade Commission charges that he was responsible for sending millions of unwanted text messages to consumers that deceptively promised “free” gift cards and electronics.

The marketer, Jason Q. Cruz of West Bend, Wisc., was a subject in a series of FTC complaints targeting the senders of deceptive spam text messages. In its complaint against Cruz, the FTC alleged that he sent text messages to consumers around the country offering free merchandise, such as $1,000 gift cards to major retailers or free iPads, to those who clicked on links in the messages. A typical message read, “You have been selected for a $1,000 Walmart GiftCard, Enter code ‘FREE’ at [website address] to claim your prize: 161 left!”

Consumers who clicked on the links did not receive the “free” merchandise. Instead, consumers were taken to websites that requested personal information and required them to sign up for multiple risky trial offers to qualify for the supposedly “free” merchandise. Most of those trial offers were for questionable products and services that cost money and included recurring monthly charges.

“When scammers use unwanted text messages to entice consumers with deceptive offers, that’s a significant problem,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Banning a serial spammer like Mr. Cruz from sending unsolicited text messages helps the FTC take a huge cut out of scammers’ efforts to target consumers in this way.”

Under the terms of the stipulated final order, Cruz is permanently banned from sending or assisting others in sending unsolicited text messages to consumers. The order also bans Cruz from deceptively presenting an offer as “free,” and from misleading consumers about the use of their personal information.

The order also includes a judgment of more than $185,000, which represents all of the money Cruz received in connection with the scam. Under the terms of the order, all but $10,000 of the monetary judgment is suspended based on Cruz’s inability to pay the full amount.

In addition, Cruz is required to destroy all consumer information he may have acquired over the course of the scam and cooperate with any further FTC investigations.

The Commission vote approving the proposed stipulated final judgment was 4-0. The FTC filed the stipulated final judgment in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court judge signed and approved the order on Jan. 16, 2014.

NOTE: Stipulated final judgments have the force of law when approved and signed by the District Court judge.

IPHONE SPAMMER SETTLES FTC CHARGES

FROM:  FEDERAL TRADE COMMISSION 
'Free iPhone' Text Message Spammer Settles FTC Charges

An Internet marketer has agreed to settle Federal Trade Commission allegations that he blasted consumers with millions of deceptive spam text messages.

Henry Nolan Kelly was the subject of one of a series of FTC complaints filed in March against those responsible for sending millions of spam text messages to consumers with false promises of free gift cards or expensive electronic devices.

The complaint against Kelly alleged that he sent more than 20 million unwanted text messages to consumers across the country, offering supposedly free iPhones and iPads to those who clicked on links in the messages. Those who clicked were instead taken to sites that requested substantial personal information and required an elaborate process – often involving other purchases or paid subscriptions – to be eligible for the “free” devices.

The stipulated final order against Kelly prohibits him from having any involvement with the sending of unsolicited or unwanted text messages to consumers. In addition, Kelly will be prohibited from misleading consumers about whether they have won gifts or prizes, whether a product is “free,” and from using text messages to do the same.

The order against Kelly also imposes a monetary judgment of $60,950, which is all of the money that he received in connection with the text message spamming scam. The financial judgment is suspended due to Kelly’s inability to pay. Kelly must also cooperate with the FTC in any future investigations.

The Commission vote approving each of the stipulated final orders was 4-0. The stipulated judgment was entered by the U.S. District Court for the Northern District of Georgia on July 17, 2013.

NOTE: Stipulated orders have the force of law when signed and approved by the District Court judge. (FTC File No. X130041; the staff contact is Robin Rock, 404-656-1368.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.