FTC Asks Court to Shut Down Text Messaging Spammer

The Federal Trade Commission asked a federal judge to shut down an operation that allegedly blasted consumers with millions of illegal spam text messages, including many messages that deceptively advertised a mortgage modification website called “Loanmod-gov.net.” The FTC is asking the court to freeze the defendant’s assets.

According to the FTC complaint, the defendant behind the operation, Phillip A. Flora, sent millions of text messages, pitching loan modification assistance, debt relief, and other services. In one 40-day period, Flora sent more than 5.5 million spam text messages, a “mind boggling” rate of about 85 per minute, every minute of every day, according to additional court documents filed by the agency. The FTC alleges that consumers lose money as a result of Flora’s spam text messaging because many of them get stuck paying fees to their mobile carriers to receive the unwanted text messages.

The text messages told consumers to respond to the message or visit one of the operation’s websites. One of the sites, loanmod-gov.net, used a web address that appeared to be a government web address, claimed to provide “Official Home Loan Modification and Audit Assistance Information,” and displayed a photo of an American flag. According to the FTC’s complaint, Flora collects information from consumers who respond to the text messages – even those asking him to stop sending messages. He then sells their contact information to marketers claiming they are “debt settlement leads.”

The FTC charges that Flora violated the FTC Act by sending unsolicited commercial text messages to consumers, and by misrepresenting that he was affiliated with a government agency. In addition, the FTC charges that he advertised his text message blasting services by sending consumers e-mail spam that violated the CAN-SPAM Act – a law that sets the rules for commercial email. The FTC alleges that his e-mail spam failed to include a way for consumers to “opt-out” of future messages and failed to include the physical mailing address of the sender, as required by the law.

The FTC acknowledges the invaluable assistance it received from Verizon Wireless, AT&T, and CTIA - The Wireless Association in this matter.

The Commission vote authorizing the staff to file the complaint was 5-0. It was filed in the U.S. District Court for the Central District of California.

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 complaint is not a finding or ruling that the defendant has actually violated the law. 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 1,800 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.

(FTC File No. 102 3005)