A group of affiliate marketers has agreed to settle Federal Trade Commission charges that they blasted consumers with more than 30 million deceptive spam text messages and directed recipients of the spam text messages to deceptive websites.
Cresta Pillsbury, Jan-Paul Diaz, Joshua Brewer and Daniel Stanitski, and their company Ecommerce Merchants, LLC, which did business as Superior Affiliate Management, were among the subjects of a series of FTC complaints filed in March against the senders of text message spam.
The FTC’s complaint alleged that the defendants sent spam text messages to consumers across the country, offering supposedly free iPhones, iPads, and $1000 gift cards to those who clicked on links in the messages. A typical message stated, “FREE MSG: You Have Been Chosen To Test & Keep The New iPad For Free Only Today!! Go To [scam website] And Enter 2244 And Your Zipcode To Claim It Now!”
Those who clicked on the links did not receive the promised items, but were taken instead to sites that requested personal information and required them to sign up for numerous additional offers – often involving other purchases or paid subscriptions.
The stipulated final order against Pillsbury, Diaz, Brewer and Stanitski permanently bans them from any involvement with sending unauthorized or unsolicited text messages. In addition, they are prohibited from deceptively presenting an offer as “free,” or misleading consumers about the use of personal information collected in the process of such an offer or the steps required and costs involved in redeeming it.
The defendants also allegedly operated a network of affiliates who blasted out spam text messages on their behalf. The stipulated final order prohibits defendants from operating an affiliate network for deceptive purposes, and requires them to inform members of any future affiliate network they operate of the terms of the order and to monitor the affiliates to prevent them from conducting deceptive or unfair activities.
The order also contains a monetary judgment of $356,950, which represents the full amount of money the defendants earned from the scam after paying their affiliates. The judgment is suspended due to their inability to pay. It also requires the defendants to cooperate with the FTC in any future investigations.
The court also entered a default judgment against the defendants’ company, Ecommerce Merchants, LLC.
This marks the third settlement in the FTC’s cases against the operators of massive text spam operations. Previous settlements have been entered with Henry Nolan Kelly and Rentbro, Inc.
The Commission’s vote authorizing staff to file the stipulated final order was 4-0. The FTC filed the stipulated final order for permanent injunction in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court judge signed and approved the order, along with the default judgment, on Nov. 12, 2013.
NOTE: Stipulated orders have the force of law when signed and approved by the District Court judge.
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.