A series of companies accused of operating a massive scam that saw sending unwanted text messages to millions of consumers - many of whom later received illegal telemarketing calls, robocalls, phony 'free' merchandise offers - agreed to pay approximately $10 million to the Federal Trade Commission (FTC) to settle the government charges.
The scam involved sending enticing texts to consumers and lure them to sign up for what masquerade as an offer to get gift cards of around $1,000 from the major retailers namely Target, Walmart and Best Buy. The bait was chiefly designed to lead the consumers through a mischievous process that in turn got hold of the consumers' personal data and sold them to marketers, stuffed unwanted charges on their bills, and drove them toward paid subscriptions against which the alleged scammers received affiliate referral fees.
"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."
A majority of the settlement (a jaw-dropping $7.8 million) is supposed to be paid by one of the defendant groups. Garry Jonas; 7657030 Canada 1; Acquinity Interactive; Gregory Van Horn;
Revenue Path E-Consulting; Revenuepath; and Sarita Somani, were responsible for millions of illegal text messages, bootleg charges on mobile phone bills, deceptive claims regarding 'free' merchandise and sending of illegitimate robocalls.
In order the settle charges for illegal cell phone bill cramming, Boomerang International and Polling Associates Inc. must pay $1.4 million.
The last and the final group that was found guilty of making millions of illegitimate robocalls, had an $8 million judgment suspended because of its sheer inability to pay. Instead, Matthew Beucler along with Worldwide Commerce Associates and Firebrand Group had to pay $100,000 and surrender certain assets including two bikes, a Cadillac Escalade and a property in California.
Unfortunately, the FTC's announcement didn't throw any light on the consumers who lost their valuable money.