The Federal Trade Commission is on a mission to protect consumers from unscrupulous mobile marketing. Today, it took aim against text messaging scammers and filed eight complaints against entities that used the promise of Best Buy, Target and Walmart gift cards to harvest personal information.
The texting organizations caught in the FTC crosshairs a host of obscure companies and individuals: AdvertMarketing, Superior Affiliate Management, Rentbro, Jason Q. Cruz (who does business as Appidemic), Rishab Verma (Verma Holdings), Henry Nolan Kelly and Seaside Building Marketing.
The site operators charged are SubscriberBASE Holdings, Jeffrey French, All Square Marketing, Threadpoint, PC Global Investments, Slash 20, Brent Cranmer, Christopher McVeigh (CMB Marketing), Michael Mazzella (Mazzco Marketing). Site operators hired the text message delivery firms to enable the gift card scams, according to the FTC.
The FTC is seeking restraining orders against the defendants, and wants to recoup money for consumers. The cases go to court in the next few days, said Steve Baker, Director of the FTC's Midwest Region, who added the agency received "roughly 20,000 complaints," that led to the cases announced today.
Retailers whose brands were exploited in the scams "have all issued warnings about this," said Mr. Baker. "They're unhappy about this…. Their trouble is the same one we have, which is actually finding these guys."
Not only is sending spam texts illegal under the Telephone Consumer Protection Act, they also can cost cellphone owners money depending on their mobile service contracts. It also happens to be National Consumer Protection Week, providing a relevant backdrop for this morning's FTC announcement.
The FTC has taken additional recent action in the mobile privacy arena. In December, it updated the Children's Online Privacy Protection Act for the mobile age, categorizing geo-location information, photos and videos, and mobile device IDs as personal information, requiring parental consent before such data is collected on children under age 13.
A total of 29 defendants were charged in courts across the nation. The FTC said the organizations collectively sent more than 180 million texts.
The sites requested personal data including health information. Once consumers made it through a web of data requests, they were asked to provide credit card numbers in order to be eligible to receive gift cards, which the FTC said it believes were not provided. The agency claims the data was sold to third parties for subsequent marketing efforts.
One marketer associated with Seaside Building Marketing, Phillip A. Flora, has already come under FTC fire. Almost exactly two years ago the FTC asked a federal judge to shutter Mr. Flora's alleged text message spam business. The agency said Mr. Flora sent more than 5.5 million texts in a 40-day span promoting mortgage loan modification services. His operation allegedly was used to collect consumer data when people responded to the messages. The commission said today it is seeking a contempt action against the "serial text message spammer."
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