The Daily Item, Sunbury, PA

February 8, 2014

Marketer settles FTC accusations of spam texts

By Gitte Laasby
Milwaukee Journal Sentinel

— A Wisconsin man has settled with the Federal Trade Commission after being accused of sending at least 14 million deceptive spam text messages to consumers all over the country offering them free iPads and $1,000 gift cards to Wal-Mart and Best Buy, the FTC announced Wednesday.

The FTC said in a news release that Jason Q. Cruz made more than $185,000 off of sending spam text messages such as, “You have been selected for a $1,000 Walmart GiftCard, Enter code ‘FREE’ at (website address) to claim your prize: 161 left!”

Many of the text messages implied that the consumer won a contest. But consumers who clicked Cruz’s text messages didn’t get any free merchandise, according to the FTC’s complaint against Cruz.

Instead, they were taken to websites, some of them featuring the companies’ logos, that requested personal information such as names, mailing addresses, date of birth and phone numbers in order to qualify for the prize.

Consumers were typically required to sign up for 10 risky trial offers in order to qualify for the supposedly free merchandise, the FTC said. Most of the trial offers were for “questionable products and services” that cost money and included recurring monthly charges.

“Defendant’s text messages fail to clearly and conspicuously disclose that consumers must incur expenses or other obligations to obtain the promised free merchandise,” the FTC’s complaint says.

Cruz started sending unsolicited text messages in March 2012, and he didn’t stop when consumers asked him to, the FTC said.

Cruz’s agreement with the FTC includes a monetary judgment of the $185,041 he made, but because Cruz is unable to pay the full amount, all but $10,000 of it will be suspended, the FTC said.

Cruz will be required to destroy all consumer information he may have acquired over the course of the scam.

He will also be banned from sending or assisting others in sending unsolicited text messages to consumers, from deceptively presenting an offer as “free,” and from misleading consumers about the user of their personal information. He’ll be required to collaborate with the FTC in other investigations.

“When scammers use unwanted text messages to entice consumers with deceptive offers, that’s a significant problem,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in the release. “Banning a serial spammer like Mr. Cruz from sending unsolicited text messages helps the FTC take a huge cut out of spammers’ efforts to target consumers in this way.”

Cruz, who also did business as Appidemic Inc., was among 29 defendants across the country charged in March 2013 with collectively sending more than 180 million unwanted text messages to consumers. Like Cruz, many of the other defendants also had their monetary judgments suspended because they’re unable to pay.

A judge at the U.S. District Court for the Northern District of Illinois, Eastern Division signed and approved the stipulated agreement Jan. 16.

Consumers can help combat spam text messages by forwarding them to SPAM (7726). It’s free to do so. The phone carriers keep track of patterns and collaborate with the government to crack down on the spammers.

The FTC advised consumers who get unwanted text messages to delete them. Consumers should also refrain from clicking on links that could take them to spoof sites that will steal their personal information. Entering any special codes or confirming or providing personal information is also a bad idea.

“Legitimate companies don’t text or email to ask for sensitive information like your Social Security number, bank account numbers, credit card and utility account numbers, or passwords,” the FTC said in an advisory.