Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Marketer settles FTC charges of deceptive, unwanted texts, (Feb 5, 2014)

By Jody Coultas, J.D.

The FTC announced today that an affiliate marketer has settled charges that he sent millions of unwanted text messages to consumers that deceptively promised “free” merchandise. A consent decree resolving the agency’s action has been entered by the federal district court in Chicago (FTC v. Cruz, FTC File No. 132 3051, Case: 1:13-cv-01530).

The marketer, Jason Q. Cruz, allegedly sent text messages to consumers offering free merchandise to those who clicked on links in the messages. Consumers were taken to websites that requested personal information and required them to sign up for multiple risky trial offers to qualify for the “free” gift cards and electronics. Most of those trial offers were for questionable products and services that cost money and included recurring monthly charges.

The marketer was permanently banned from sending or assisting others in sending unsolicited text messages, deceptively presenting an offer as “free,” and from misleading consumers about the use of their personal information.

The settlement included a judgment of more than $185,000, which represented all of the money the marketer received in connection with the scam. All but $10,000 was suspended based on the marketer’s inability to pay. The marketer was also required to destroy all consumer information he may have acquired and cooperate with all FTC investigations.

This case was part of an FTC crack down on affiliate marketers that allegedly bombarded consumers with hundreds of millions of unwanted spam text messages promoting deceptive websites falsely promising “free” gift cards.

The case is No. 1:13-cv-01530.

Attorneys: William J. Hodor for FTC. Jaime T. Zeas for Jason Q. Cruz.

News: ConsumerProtection FederalTradeCommissionNews