FTC Cracks Down SMS Spamming
September 18, 2013

Spammers Beware! FTC Continues Crusade Against SMS Spam Scams

Michael Harper for redOrbit.com - Your Universe Online

In March the Federal Trade Commission (FTC) said it was “Game Over” for big time SMS spammers. Several months later they’ve settled charges with one group responsible for sending millions of spammy text messages.

Rentbro, a Florida-based company, agreed to turn over what remaining assets it had left as well as pay back an additional $377,321 that the company collected while it was in operation. While in business, Rentbro sent over 42 million deceptive text messages promising the recipients gift cards to Best Buy and Walmart. The recipients were asked to hand over their credit card numbers and social security numbers in exchange for the gift cards of amounts upwards of $1,000. To make matters worse, even those who gave away the most information were still left without a gift card at the end of the ordeal.

Daniel Pessin and Jacob Engel of Fort Lauderdale, Florida, the men behind Rentbro, agreed to the FTC settlement but did not admit or deny any wrongdoing as a part of this case. The two men were charged with unfair or deceptive acts in violation with the Federal Trade Commission Act. They did not wish to comment on the case.

According to the FTC, a typical message sent from Rentbro arrived with a 954 area code (Fort Lauderdale) and contained a message similar to “'Your entry in our drawing WON you a FREE $1,000 Target Giftcard! Enter '312' at www.target.com.tgrz.biz to claim it and we can ship it to you immediately!'"

Any recipient who followed the link in the text message was then taken to another site where they were asked to submit personal information to receive their cards. Even after this personal data was submitted, the websites went further to ask the recipients to take part in over a dozen trial offers in order to claim their free card. If a recipient made it this far in trying to claim their card, the websites asked them to recruit three others to go through the entire process.

The FTC announced they would be cracking down on these SMS spammers in March, filing charges against 29 defendants. The Rentbro case is the second to be settled this year, but FTC Midwest Region Director C. Steven Baker said their efforts are already being felt.

“FTC action in cases like this one have dramatically reduced the amount of illegal text message spam, especially as it relates to bogus gift card offers,” said Baker in a press statement. "Not only are spam texts annoying and illegal, but they can also cost consumers money."

The FTC will now turn their attention towards companies AdvertMarketing, Appidemic, Seaside Building Marketing, SubscriberBASE Holding, Superior Affiliate Management, and Verma Holdings as a part of their ongoing effort. Before the FTC began pursuing these text spammers, more than 180 million text messages had already been sent out, the majority of which originated in Florida, California and Texas.

Court filings have shown these spammers made their money by luring people to the free gift websites, but they were only paid if people entered their personal information. The free gift website owners, in turn, were paid by those who were offering the trial offers, but only when people signed up for the trials.