Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Text message spammer settles FTC charges of deceptive messages promoting free gift cards, (Jul 22, 2014)

By Linda O’Brien, J.D., LL.M.

A Houston, Texas-based text message spammer and his company have agreed to settle FTC charges that their operation was responsible for sending millions of unsolicited messages to consumers across the country, which contained false promises of “free” $1,000 gift cards for major retailers, the FTC announced today (FTC v. Verma Holdings, LLC, File No. 132-3018).

In its complaint, the FTC alleges that Rishab Verma and his company, Verma Holdings, LLC, sent unauthorized and unsolicited commercial electronic text messages throughout the United States, beginning in January 2012. In violation of the FTC Act, the defendants sent at least four million messages that falsely promised free gift cards to draw consumers to websites that collected sensitive personal information, the FTC charged. The sites also required consumers to provide credit card information to sign up for trial offers.

The complaint was filed in the federal district court in Houston, Texas.

Under the terms of the proposed settlement with the FTC, Verma and his company will be permanently banned from sending unwanted or unsolicited commercial text messages or assisting others in doing so. In addition, the two will be prohibited from misrepresenting to consumers that a product is “free,” that they have won a prize or been selected for a gift, or that consumers’ personal information is needed to send free merchandise.

The settlement contains a monetary judgment of $2,863,000, which is suspended due to the defendants’ inability to pay after Verma and the company pay $26,100.

The Commission vote approving the proposed stipulated final judgment was 5-0.

Companies: Verma Holdings, LLC

News: ConsumerProtection FederalTradeCommissionNews