Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Text spammers settle FTC charges regarding bogus “free” gift cards, (Sep 17, 2013)
Organizations Mentioned:Best Buy | Walmart
By John W. Arden, J.D., LL.M.
An affiliate marketing company and its two principals have agreed to settle FTC charges that they sent out more than 42.5 million unwanted and deceptive text messages to consumers, falsely representing that the consumers had won $1,000 gift cards to major retailers and requiring them to disclose personal information in order to claim their gift cards. A stipulated order permanently enjoined the unlawful conduct, required the defendants to turn over all of their remaining assets, and imposed a partially-suspended monetary judgment of $377,321, representing all of the money received in connection with the scam (FTC v. Rentbro, Inc., September 13, 2013).
According to the FTC complaint filed February 28, 2013, Rentbro, Inc. and its principals—Daniel Pessin and Jacob Engel of Ft. Lauderdale, Florida—sent deceptive text messages to millions of consumers, representing that they had been selected to receive a $1,000 gift card from a retailer such as Best Buy, Target, or Walmart. A typical message stated “Your entry in our drawing WON you a FREE $1,000 gift card Enter ‘312’ at www.target.comtgrz.biz to claim it and we can ship it to you immediately.”
The hyperlink included in the text message brought consumers to a website the defendants created to reinforce the deceptive message and then to a variety of third-party websites where consumers were asked to submit personal information under the guise of claims their gift cards, according to the FTC. After collecting consumers’ personal information, the websites told consumers they had to sign up for more than a dozen risky trial offers, none of which was free, to qualify for the “free” gift card.
This case was the second settlement stemming from an FTC enforcement sweep initiated earlier this year against 29 defendants responsible for sending more than 180 spam text messages, the agency said.
The Commission voted 4-0 to authorize the staff to file the stipulated final order. The stipulated order for permanent injunction was filed in the federal district court in Chicago, which approved the order on September 13, 2013.
News: ConsumerProtection Privacy FederalTradeCommissionNews