FTC Adds Mobile Cramming to Charges Against Text Spam and Robocall Network

The Federal Trade Commission added new charges of mobile cramming to a complaint the agency previously filed against a group of scammers who allegedly sent millions of unwanted text messages and robocalls to consumers.

The amended complaint adds the mobile cramming charges to the Commission’s original complaint allegations that the operation used text messages promising free $1,000 gift cards and iPads as a way to deceive consumers into signing up for costly subscriptions and giving up personal information.

When consumers followed links in the spam text messages, they were prompted to enter personal information, including their mobile phone number.  The defendants told consumers that the personal information was necessary to ship them the free prize.  However, the defendants used the personal information for several other purposes, including placing robocalls to consumers.   Many consumers who entered their personal information allegedly were then prompted to “confirm” their mobile phone number and were then sent a text message telling them to enter a PIN number on the defendants’ website in order to “claim their prize.”

The amended complaint alleges that, in fact, by confirming their mobile phone number and entering the provided PIN, consumers were being signed up for unwanted premium text messaging services, resulting in a charge of $9.99 per month on their mobile phone bill. According to the FTC’s amended complaint, consumers were not given adequate notice that confirming their number would lead to monthly charges – this notice appeared only in small print at the bottom of the screen or in a separate hyperlinked page.

Two defendants, Burton Katz, also doing business as Polling Associates, Inc. and Boomerang International, LLC, and Jonathan Smyth, also doing business as Polling Associates, Inc., are accused of overseeing the mobile cramming operation along with the creators of the websites.

In addition to adding the defendants involved in the mobile cramming, the amended complaint also adds three new defendants to the case who were believed to be responsible for sending millions of spam text messages and operating the websites to which those messages would direct consumers. The additional defendants are Scott Modist, Joshua Greenberg and Gregory Van Horn. All three are named individually and as officers of Acquinity Interactive, LLC; Modist and Greenberg are also named as officers of 7657030 Canada, Inc.

The Commission vote to file the amended complaint was 5-0. The complaint was filed in the U.S. District Court for the Southern District of Florida.

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.