Markets Wired

The Federal Trade Commission has moved to shut down an international network of scammers that sent millions of unwanted text messages to consumers, using the lure of “free” gift cards and electronics to entice consumers into an elaborate scheme designed to take their money and target them for illegal robocalls.

In its complaint, the FTC alleges that scammers sent unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.

Consumers who clicked on the links in the messages found themselves caught in a confusing and elaborate process that required them to provide sensitive personal information, apply for credit or pay to subscribe to services to get the supposedly “free” cards. In addition, consumers’ phone numbers were signed up to receive unwanted automated telemarketing calls, also known as robocalls.

This complaint builds on a nationwide sweep conducted by the Commission in March to crack down on scammers who use these spam text messages to deceive consumers.

The FTC complaint names nine defendants who allegedly were involved in various aspects of the operation in violation of the FTC Act and the Telemarketing Sales Rule.  It seeks injunctions against the defendants preventing them from continuing their alleged deceptive and unfair practices as well as requiring them to pay monetary relief.

According to the complaint, when consumers followed the links included in the unwanted messages, they were directed to sites that collected a substantial amount of personal information, including in some instances health information, before being allowed to continue toward receiving the supposed gift cards.  In many cases, the information was requested under the guise of being shipping information for the supposed gift cards.  The Commission alleges that in addition to selling the information for marketing purposes, the defendants also made unwanted automated telemarketing calls to consumers selling products such as home security, satellite television and travel services.

Once consumers entered their personal information, they were directed to another site and told they would have to participate in a number of “offers” to be eligible for their gift card.  In some cases, consumers were obligated to sign up for as many as 13 of the offers. These offers frequently included recurring subscriptions for which consumers were required to provide credit card information and pay up front for “shipping and handling” charges.  In other cases, they required consumers to submit applications for credit that would be reflected in their credit reports and possibly affect their credit score.

In most, if not all, instances, it would be impossible for a consumer to receive the allegedly “free” merchandise without spending money, according to the complaint.

The defendants in the case are Acquinity Interactive, LLC, located in Deerfield Beach, Fla.; 7657030 Canada Inc., located in Kirkland, Quebec, and also doing business as Acquinity Interactive; Garry Jonas, an officer of Acquinity Interactive; Revenue Path E-Consulting Pvt Ltd, located in Pune, India; Revenuepath Ltd, registered in Nicosia, Cyprus; Worldwide Commerce Associates, LLC, registered in Las Vegas, Nev., and also doing business as WCA; Sarita Somani, an officer of the Revenue Path defendants and Worldwide Commerce Associates; Firebrand Group S.L., LLC, registered in Las Vegas, Nev.; and Matthew Beucler, an officer of Firebrand.

The Commission vote authorizing the staff to file the complaint was 4-0.  The complaint was filed in the U.S. District Court for the Northern District of Illinois.  

NOTE:  The Commission files a complaint when it has “reason to believe” that the law has been or is being violated and it appears to the Commission that a proceeding is in the public interest.  The case will be decided by the court.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.