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Do you like them on the screen
Of your mobile phone machine?
I do not like text message spam.
I do not like them, Sam I am.

Fighting back against text message spam isn’t child’s play, and consumers have sent the strong message they’re not fans of unsolicited texts — especially ones conveying deceptive claims.  A series of law enforcement actions just filed by the FTC drives that point home and represents the latest move against misleading practices in mobile advertising and affiliate marketing.

According to the FTC, the defendants sent (or had someone send) bazillions of texts to consumers’ cell phones that deceptively offered “free” merchandise or prizes.  One count in the complaint charges that sending unauthorized or unsolicited commercial texts is an unfair practice, in violation of Section 5 of the FTC Act.  Why unfair?  Many consumers who received the texts have wireless plans that require them to pay for each text they get.  Others have plans that allow a fixed number of texts per month, but charge customers if they go over that amount.  That means that many consumers actually had to pay for the defendants' messages.  Applying the legal definition of an “unfair practice” under the FTC Act, it’s likely the defendants caused substantial injury that consumers couldn’t reasonably avoid and that wasn’t outweighed by benefits to consumers or competition.

But the FTC says the violations don’t stop there.  Many of the more than 180 million texts claimed the person had won a contest or had been specially selected for a prize — for example, “You have won a free $1000 Walmart Gift Card” or similar merchandise from Target, Best Buy, or other major retailers.

The next step:  The texts directed people to click on a link and enter a code to claim the “prize."  After more complicated steps, consumers were sent to other sites operated by third parties.  Those sites reinforced the “prize” message, but required people to participate in numerous other offers — often more than 10 — to qualify for the promised free item.  According to the FTC, in most cases, it wasn't possible for people to get the “free” merchandise without shelling out cash.  Some of the offers involved complicated negative options or required people to turn over their credit card numbers.  Even if people made it through the exhausting travail, they were finally told that to get the promised gift card, they had to line up three more people to complete the process.  None of that was clearly disclosed in the text messages.

Furthermore, at various points in the process, consumers had to input a substantial amount of personal information.  Although the defendants often collected it under the guise of needing to know where to ship the “prize,” the FTC says the info was sold for marketing purposes — something else that wasn’t clearly disclosed to people.

The lawsuits name 19 individuals and companies that sent the unwanted texts, as well as 10 operators of the deceptive sites.  According to the FTC, it was an affiliate marketing operation.  The defendants who sent the texts were paid by the operators of the sites based on how many people eventually entered their information.  Then in turn, the operators of the sites were paid by the businesses that gained customers or subscribers through the “offer” process.

One defendant worth special mention:  Phillip Flora, who was barred for life in an earlier case from sending spam texts.  The FTC says he’s part of this operation, so the agency is pursuing a contempt action against him.

The cases are pending in federal courts in California, Georgia, Illinois, and Texas.


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