Do you like them on screen?
Your cell phone?
I don’t like text spam.
I don’t like them, Sam.
Fighting back against spam is no child’s play, consumers have sent a strong message that they don’t like unsolicited text messages, especially those that convey deceptive information. The series of enforcement actions just filed by the U.S. Federal Trade Commission (FTC) illustrate this point and represent the latest effort to target misleading practices in mobile advertising and affiliate marketing.
According to the FTC, the defendants sent (or had people sent) mass text messages to consumers’ cellphones, deceptively offering “free” goods or prizes. An allegation in the complaint is that sending unauthorized or unsolicited commercial texts is an unfair practice and violates Section 5 of the Federal Trade Commission Act. Why is it unfair? Many consumers who receive text messages have wireless plans that require them to pay for each text message they receive. Other companies have plans that allow a fixed number of newsletters to be sent each month, but charge customers if they exceed that number.This means that many consumers actually have to pay Information about the defendant. Applying the legal definition of “unfair practice” under the FTC Act, the defendants likely caused substantial harm to consumers that could not reasonably be avoided and that harm would not be outweighed by benefits to consumers or competition.
But the FTC says the violations don’t stop there. Of the more than 180 million text messages, many claimed the person had won a contest or been specially chosen to receive a prize, such as, “You won a free $1,000 Walmart gift card” or came from Target, Best Buy or other major Branded retailers of similar merchandise.
Next step: The text directs people to click on a link and enter a code to receive the “prize.” After more complicated steps, consumers are taken to other websites operated by third parties. These sites reinforce the “prize” message but require people to participate in many other offers (often more than 10) to qualify for the promised free merchandise. According to the FTC, in most cases, it’s impossible for people to get “free” goods without spending cash. Some offers involve complex negative options or require people to hand over their credit card numbers, even after people go through hoops and are eventually told they have to wait in line for three more people to get the promised gift card. Complete the process. None of this was explicitly disclosed in the text message.
In addition, consumers must enter a large amount of personal information at various stages of the process. Although the defendants often collected this information under the guise of needing to know where the “prizes” were being shipped, the FTC said the information was sold for marketing purposes — among other purposes that were not explicitly disclosed to people.
The lawsuits name 19 individuals and companies who sent spam text messages, as well as 10 operators of deceptive websites. According to the Federal Trade Commission, this is an affiliate marketing operation. The website operator paid the defendant who sent the text message a fee based on the number of people who ultimately entered their information. Businesses that acquire customers or subscribers through the Quotation process then pay the website operator.
One defendant who deserves special mention is Phillip Flora, who was banned for life from sending spam messages in a previous case. The FTC says he participated in the operation, and the agency is filing contempt proceedings against him.
The cases are pending in federal courts in California, Georgia, Illinois and Texas.
