Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Marketing scammers settle FTC charges for $4.2 million, (Jun 12, 2014)

By Greg Hammond, J.D.

Two marketing scammers and their company, Advert Marketing, Inc., have settled charges that they engaged in unfair and deceptive acts, in violation of the FTC Act, the Commission announced today. Scott A. Dalrymple of Pennsylvania, Robert Jerrold Wence of Texas, and Advert were charged with sending over 30 million unwanted text messages to consumers across the U.S., along with false promises that consumers would receive a free $1,000 gift card to retail companies like Walmart, Target, and Best Buy.

The two-count complaint, filed in the federal district court in Houston, alleged that Advert, Dalrymple, and Wence (1) failed to inform consumers of the costs and obligations they would have to undertake in order to receive the “gift” or “prize” and (2) have caused or are likely to cause substantial injury to consumers through their unauthorized or unsolicited commercial electronic text messages to consumers’ mobile telephones. Such practices, according to the Commission, violate the FTC Act.

The settlement reached by Advert, Dalrymple, Wence, and the FTC provides for a monetary judgment of $4.2 million. However, the monetary judgment will be partially suspended due to the defendants’ inability to pay it. Nevertheless, both Dalrymple and Wence will be required to remit $15,000 each to the FTC, and will be further required to destroy all consumer data they collected during their text message spam operation.

The three defendants also will be permanently restrained from sending or assisting others in sending unauthorized or unsolicited commercial electronic text messages to mobile telephones and other wireless devices. In addition, they will be enjoined from: (1) misrepresenting or assisting others in misrepresenting that a good or service is free or without cost or obligation; (2) misrepresenting that a consumer has won a contest or has won a gift or prize; (3) misrepresenting that personal information is being collected to send consumers merchandise; (4) failing to disclose the material terms and conditions of any offer; and (5) allowing an affiliate or affiliate network to participate in a similar scam.

The Commission approved the proposed stipulated final judgment by a vote of 5-0.

Companies: Advert Marketing, Inc.

News: Advertising ConsumerProtection FederalTradeCommissionNews