The Federal Trade Commission brought its first suit against an alleged Short Message Service (“SMS”) spammer who the agency claims sent more than 5.5 million unsolicited messages to consumers’ mobile phones.
The agency is seeking to freeze the assets of the California-based defendant, Philip A. Flora, to shut down his operation.
The messages advertised a variety of services, including loan modification assistance and debt relief, according to the FTC, and some messages were designed to deceive consumers into thinking they were sent from a government site.
Sending text messages at a “mind boggling” rate of what the FTC estimates to be 85 per minute, 24 hours per day, the defendant caused consumers to lose money because many were forced to pay fees for the unsolicited messages to their mobile carriers, according to the complaint.
The messages instructed recipients to visit a specific Web site or respond to the message. However, if the recipient responded, the defendant collected the consumer’s information and would then sell it to marketers, the FTC alleged, including those who contacted Flora to request that he stop sending them spam texts.
Further, the defendant misrepresented that he was affiliated with a government agency, as one of the sites listed in the messages was “loanmod-gov.net,” which purported to provide “Official Home Loan Modification and Audit Assistance Information,” and used images like an American flag. “Homeowners, we can lower your mortgage payment by doing a Loan Modification. Late on payments OK. No equity OK. May we please give you a call? loanmod-gov.net” read a text from the defendant.
The FTC also charged the defendant with violations of the federal CAN-SPAM Act for allegedly sending unsolicited e-mails advertising his text message blasting service that failed to include his physical mailing address and a way for recipients to “opt out” of future messages.
To read the complaint in FTC v. Flora, click here.
Why it matters: The complaint against Flora, the first filed against an alleged text spammer, is two-fold. The agency alleges that his unsolicited text messages violated Section 5 of the FTC Act (as CAN-SPAM does not cover text messages) as an unfair and deceptive business practice, particularly because many consumers were charged by their mobile carriers for receiving the texts. In addition, the defendant’s use of spam e-mail to advertise his spam text services constituted a violation of CAN-SPAM, the FTC claims. While it is the agency’s first foray into spam texts, consumers have previously filed their own suits, alleging that spammers have violated the Telephone Consumer Protection Act by sending unwanted text messages.