Three groups of defendants have agreed to pay the Federal Trade Commission (FTC) $9.3 million to settle claims that they operated a scam to send unsolicited and deceptive text messages to millions of consumers. The settlement is the result of a major campaign by the FTC targeting senders of unsolicited commercial messages using the promise of free gifts or products to get consumers to reveal “personal information for sale to marketers, their mobile numbers to cram unwanted charges on their bill, and to drive them to paid subscriptions for which the senders receive affiliate referral fees.” The FTC filed at least eight different complaints around the country charging 29 defendants with sending approximately 180 million unsolicited text messages to consumers. This settlement resolves FTC v. Acquinity Interactive, LLC, et al., No. 1:13-cv-05380 filed on July 29, 2013 by the FTC in the Northern District of Illinois.

  • Settlement Group No. 1 ($7.8 Million): Defendants were accused of sending millions of illegal text messages, placing unauthorized charges on mobile phone bills, making deceptive claims about free merchandise and assisting and facilitating illegal robocalls. Defendants agreed to pay $7.8 million and to, inter alia, refrain from sending unwanted text messages or placing charges of any kind on a consumer’s telephone bill. Defendants also agreed not to make any misrepresentations to consumers regarding products or services and to obtain consumers’ express informed consent before billing them for and product or service. (The defendants in this settlement group are Acquinity Interactive, LLC; 7657030 Canada Inc., Garry Jonas, Gregory Van Horn, Revenue Path E-Consulting Pvt, Ltd.; Revenuepath Ltd.; and Sarita Somani.)
  • Settlement Group No. 2 ($1.4 Million): Defendants were accused of placing unauthorized charges on consumers’ mobile phone bills. Defendants agreed to pay $1.4 million and to refrain from placing charges of any kind on consumers’ telephone bills. Defendants also agreed not to make any misrepresentations to consumers regarding products or services and to obtain consumers’ express informed consent before billing them for and product or service. (The defendants in this settlement group are Burton Katz, individually and also doing business as Polling Associates Inc. and Boomerang International, LLC, and Jonathan Smyth, individually and also doing business as Polling Associates Inc.)
  • Settlement Group No. 3 ($100,000): Defendants were accused of making millions of illegal telemarking robocalls to consumers. Defendants agreed to refrain from sending robocalls, to pay the FTC $100,000 and to surrender certain real and personal property (due to financial inability to satisfy $8 million judgment). (The defendants in this settlement group are Firebrand Group S.L., LLC, Worldwide Commerce Associates, LLC, and Matthew Beucler.)

“The operators of this scam bombarded consumers for months with deceptive text messages offering ‘free’ items, but the costs to consumers were very real – including the misuse of their personal information to cram unwanted charges on their phone bills,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “I am pleased that these scammers will be forced to turn over millions of the dollars they took from consumers and banned from repeating these actions in the future.”

The FTC and the Federal Communications Commission (FCC) are actively pursuing the enforcement of federal laws banning unsolicited commercial messages sent to wireless devices.

FTC Release on Settlement:

http://www.ftc.gov/news-events/press-releases/2014/10/defendants-massive-spam-text-message-robocalling-mobile-cramming

Related Filings:

http://www.ftc.gov/enforcement/cases-proceedings/122-3161/acquinity-interactive-llc-et-al