FTC Takes on Text Message Spam With Eight Lawsuits

Feds going after companies that sent 180 million spam texts promising free gifts

It may be illegal to send text spam, but that hasn't stopped companies from bombarding consumers with hundreds of millions of text messages. Cracking down on the practice, the Federal Trade Commission said it has filed eight lawsuits against companies that have collectively sent more than 180 million unsolicited text messages.

In the complaints, the FTC charged 29 defendants with sending texts that promised free gift cards and steered consumers towards deceptive websites.

Spam texts have cost consumers "millions of dollars," because some cell phone plans require consumers to pay per text message or the messages force consumers beyond their monthly allotment, Steve Baker, the FTC's midwest director said during a press conference in Chicago.

In such spammy text messages, consumers are lured to websites with the promise of free gifts or prizes worth as much as $1,000 from big retailers such as Best Buy, Walmart, and Target. But when unknowing consumers click on such links, they are often then asked to provide all kinds of personal information like email addresses, or urged to apply for a credit card or subscribe to a service, per the FTC. In some cases, consumers are asked to send money to receive these gifts.

Yet even after jumping through all the digital hoops, consumers are left with nothing but more spam. "No one has gotten a gift that we know of," Baker said.

The FTC has received 50,000 complaints for spam texts in general and 20,000 complaints against specific scams named in the lawsuits.

Major big box retailers are also distressed by a practice that tarnishes their brand and have made attempts to warn consumers.

The cell phone companies have also tried to help consumers block the texts, but the offending companies change numbers frequently and use automated systems that can send 70 to 80 texts per minute, making it difficult to block, reports the FTC.

"It's really a slick operation," Baker said.

Of the eight suits filed, seven were filed against the alleged senders of the unsolicited text messages and one was filed against the operators of the deceptive websites to which consumers were directed. The companies named in the suits are Superior Affiliate Management; Rentbro, Inc.; Jason Q. Cruz; Rishab Verma; AdvertMarketing; Henry Kelly; Seaside Building Marketing; and SubscriberBASE Holdings, Inc. The FTC is asking the courts for an immediate injunction and damages that would be used to return money to the victims.