FTC Goes After Text-Message Spammers

The Federal Trade Commission filings go after 29 defendants sending 180 million phony text messages promising free gift cards

Dark Reading Staff, Dark Reading

March 9, 2013

3 Min Read

SMS text spam isn't just annoying and invasive -- in many cases, it's also downright abusive. Now the Federal Trade Commission is cracking down on some of these offenders. The FTC has filed eight complaints in courts nationwide against 29 defendants for allegedly sending more than 180 million unsolicited and deceptive text messages that, in many cases, ultimately scammed recipients of money and their personal information.

The text messages claimed to offer free gifts or $1,000 gift cards for Best Buy, Target, Walmart, and other retail chains. If a victim clicked on links in the messages, then they were often routed to malicious websites that solicited their personal information or payment for the services to get the alleged cards.

"Today's announcement says ‘game over’ to the major league scam artists behind millions of spam texts," said Charles A. Harwood, Acting Director of the FTC’s Bureau of Consumer Protection. "The FTC is committed to rooting out this deception and stopping it. For consumers who find spam texts on their phones, delete them, immediately. The offers are, in a word, garbage."

The FTC, which files complaints when there is a "reason to believe" laws have been broken, went after individuals who sent the phony text messages and the operators of the malicious websites. The list includes a notorious mobile spammer named Phil Flora who in 2011 was barred from sending spam text messages, but allegedly is back to his old tricks.

The defendants allegedly texted random phone numbers, including consumers who don't have a texting plan, thus incurring charges. Before the victims were able to "cash in" on the cards, they were sent through a byzantine series of steps on the websites that forced them to provide sensitive information, such as health information, and prompted them to sign up for other offers -- including applications for credit cards -- in order to achieve eligibility for the cards. The FTC's complaints are seeking restraining orders against the defendants.

The FTC says the information that was gathered by the scammers was sold to third-party marketing operations, without the victims knowing. "The FTC alleged that the operators of these sites violated the FTC Act by failing to tell consumers about all the conditions attached to the 'free' gift, including the possibility that consumers would actually be required to spend money to receive the gift," according to the FTC.

Among the alleged senders named in the complaints are Ecommerce Merchants, LLC/ Superior Affiliate Management); Cresta Pillsbury, Jan-Paul Diaz, Joshua Brewer, and Daniel Stanitski; Rentbro, Inc., Daniel Pessin, and Jacob Engel; Jason Q. Cruz of Appidemic, Inc; Verma Holdings, LLC and Rishab Verma; AdvertMarketing, Inc., Scott A. Dalrymple, and Robert Jerrold Wence; Henry Nolan Kelly; Phillip Flora, Sandra Skipper, Kevin Beans, and Dakota Geffre of Seasside Building Marketing Inc.; and SB Marketing.

Ten defendants were named in another complaint alleging deceptive website operations: SubscriberBASE Holdings, Inc.; SubscriberBASE, Inc.; Jeffrey French; All Square Marketing, LLC; Threadpoint, LLC; PC Global Investments, LLC; Slash 20, LLC; Brent Cranmer; Christopher McVeigh of CMB Marketing, Inc., and Michael Mazzella of Mazzco Marketing, Inc.

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