ROBOCALL/TEXT SPAM NETWORK RECEIVES ADDITIONAL CRAMMING CHARGE FROM FTC

FROM:  FEDERAL TRADE COMMISSION 

FTC Adds Mobile Cramming to Charges Against Text Spam and Robocall Network

Amended Complaint Charges Unwanted Cell Phone Billing and Adds Five Defendants

The Federal Trade Commission added new charges of mobile cramming to a complaint the agency previously filed against a group of scammers who allegedly sent millions of unwanted text messages and robocalls to consumers.

The amended complaint adds the mobile cramming charges to the Commission’s original complaint allegations that the operation used text messages promising free $1,000 gift cards and iPads as a way to deceive consumers into signing up for costly subscriptions and giving up personal information.

When consumers followed links in the spam text messages, they were prompted to enter personal information, including their mobile phone number.  The defendants told consumers that the personal information was necessary to ship them the free prize.  However, the defendants used the personal information for several other purposes, including placing robocalls to consumers.   Many consumers who entered their personal information allegedly were then prompted to “confirm” their mobile phone number and were then sent a text message telling them to enter a PIN number on the defendants’ website in order to “claim their prize.”

The amended complaint alleges that, in fact, by confirming their mobile phone number and entering the provided PIN, consumers were being signed up for unwanted premium text messaging services, resulting in a charge of $9.99 per month on their mobile phone bill. According to the FTC’s amended complaint, consumers were not given adequate notice that confirming their number would lead to monthly charges – this notice appeared only in small print at the bottom of the screen or in a separate hyperlinked page.

Two defendants, Burton Katz, also doing business as Polling Associates, Inc. and Boomerang International, LLC, and Jonathan Smyth, also doing business as Polling Associates, Inc., are accused of overseeing the mobile cramming operation along with the creators of the websites.

In addition to adding the defendants involved in the mobile cramming, the amended complaint also adds three new defendants to the case who were believed to be responsible for sending millions of spam text messages and operating the websites to which those messages would direct consumers. The additional defendants are Scott Modist, Joshua Greenberg and Gregory Van Horn. All three are named individually and as officers of Acquinity Interactive, LLC; Modist and Greenberg are also named as officers of 7657030 Canada, Inc.

The Commission vote to file the amended complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of Florida.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.

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. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

GROUP OF MARKETERS SETTLE FTC CHARGES OF SENDING DECEPTIVE SPAM TEXT MESSAGES

FROM:  U.S. FEDERAL TRADE COMMISSION 
Marketers Who Sent 'Gift Card' and 'Free iPhone' Text Spam Settle FTC Complaint
Defendants Permanently Barred From Further Scams

A group of affiliate marketers has agreed to settle Federal Trade Commission charges that they blasted consumers with more than 30 million deceptive spam text messages and directed recipients of the spam text messages to deceptive websites.

Cresta Pillsbury, Jan-Paul Diaz, Joshua Brewer and Daniel Stanitski, and their company Ecommerce Merchants, LLC, which did business as Superior Affiliate Management, were among the subjects of a series of FTC complaints filed in March against the senders of text message spam.

The FTC’s complaint alleged that the defendants sent spam text messages to consumers across the country, offering supposedly free iPhones, iPads, and $1000 gift cards to those who clicked on links in the messages. A typical message stated, “FREE MSG: You Have Been Chosen To Test & Keep The New iPad For Free Only Today!! Go To [scam website] And Enter 2244 And Your Zipcode To Claim It Now!”

Those who clicked on the links did not receive the promised items, but were taken instead to sites that requested personal information and required them to sign up for numerous additional offers – often involving other purchases or paid subscriptions.

The stipulated final order against Pillsbury, Diaz, Brewer and Stanitski permanently bans them from any involvement with sending unauthorized or unsolicited text messages. In addition, they are prohibited from deceptively presenting an offer as “free,” or misleading consumers about the use of personal information collected in the process of such an offer or the steps required and costs involved in redeeming it.

The defendants also allegedly operated a network of affiliates who blasted out spam text messages on their behalf. The stipulated final order prohibits defendants from operating an affiliate network for deceptive purposes, and requires them to inform members of any future affiliate network they operate of the terms of the order and to monitor the affiliates to prevent them from conducting deceptive or unfair activities.

The order also contains a monetary judgment of $356,950, which represents the full amount of money the defendants earned from the scam after paying their affiliates. The judgment is suspended due to their inability to pay. It also requires the defendants to cooperate with the FTC in any future investigations.

The court also entered a default judgment against the defendants’ company, Ecommerce Merchants, LLC.

This marks the third settlement in the FTC’s cases against the operators of massive text spam operations. Previous settlements have been entered with Henry Nolan Kelly and Rentbro, Inc.

The Commission’s vote authorizing staff to file the stipulated final order was 4-0. The FTC filed the stipulated final order for permanent injunction in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court judge signed and approved the order, along with the default judgment, on Nov. 12, 2013.

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