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Matthew McClellan/MEDILL

Steve Baker, FTC Midwest region director, discusses lawsuits the FTC has filed against spam text messengers.


Spam be damned: FTC sues mobile spam artists

by Matthew McClellan
Mar 7, 2013



Matthew McClellan/Medill

Steve Baker, FTC Midwest Region Director, discusses lawsuits the FTC has filed against spam text messengers.

 


The Federal Trade Commission is cracking down on text message spammers, suing 29 defendants in federal courts in the last week.

The FTC has filed eight complaints, including one in the northern Illinois district, against spammers that have sent unsolicited text messages to cell phone owners. These messages promise free gift cards or prizes worth $1,000 to major retailers such as Wal-Mart and Best Buy, as well as offers for iPhones and iPads, among other offers.

Steve Baker, FTC Midwest region director, said in a Thursday press conference at its regional office in downtown Chicago that over the last year or more, cell phones have been bombarded with these types of messages.

According to Baker, the FTC has received nearly 20,000 complaints of these kinds of solicitations and 50,000 complaints for solicitations in general. Baker said that in 2012, there were seven times as many complaints of spam text messages as in the previous year.

Baker believes the defendants, from Houston; Ft. Lauderdale and Orlando, Fla.; Atlanta; Dayton, Ohio; Dingmans Ferry, Pa.; and West Bend, Wis., are “responsible for at least 180 million spam text messages that have been sent across the country.”

“These spam text messages are more than just a nuisance,” Baker said. “They collectively cost people who receive them millions of dollars in higher charges on their cell phone bills. And people who respond to them can also become victims of other scams.”

Baker said other scams include duping cell phone owners into signing up for various “free” trial offers once they click on links in these text messages, redirecting them other sites. These trial offers then require unsuspecting cell phone owners to enter their credit card numbers and other personal information in order to take advantage of the free offers that aren’t really free.

“In order to qualify for the gift card, you have to put in your credit card number and pay at least shipping and handling,” Baker said. “We know from dealing with other cases involving this sort of free trial offers that often they’re almost impossible to cancel.”

According to a recent report by Cloudmark, a company that provides protections against spam and viruses, 60 percent of consumers said they received spam texts in the last year, and 13 percent said they clicked on the link provided through the message.

FTC staff attorney Steve Wernikoff said telephone companies have some methods to attempt to block spam text messages, but because phone numbers by scammers change so often, it’s difficult to curtail receiving these messages.

Wernikoff said the FTC hopes to learn more about the software and hardware spammers are using from the cases, but they are almost certain that it’s an automated process by the massive volume of text messages being sent—100,000 a day, approximately 70 or 80 texts a minute.

Baker said the FTC is asking the courts for injunctions to prohibit spam texting and to end deceptive claims by spammers. The FTC is also asking the courts to freeze the assets of the defendants.

Although the commission is unsure just how much money spammers have made, Baker believes the defendants have collectively amassed millions of dollars from these scams.

“Our goal here is to stop the conduct by getting immediate injunctions saying ‘don’t do this anymore,’ and then try to get the money back to victims,” Baker said.

So far, courts have entered orders in five of the eight cases, with hearings scheduled for the others in the next few days.

Baker said he hopes consumers will see a difference in the number of spam texts they receive with these matters now before the court.

In the meantime, Baker said consumers should forward spam texts to 7726, a joint depository established by cell phone carriers to prevent future messages from spammers, report these solicitations to the FTC and delete messages without responding to them.