First Set of Defendants


FTC Complaint:
  • The Federal Trade Commission ("FTC") alleged that this first group of defendants engaged in multiple illegal acts.
  • Specifically, the FTC claimed that defendants: 1) sent "millions" of illegal text messages; 2) made deceptive claims involving "free" merchandise; 3) was responsible for unauthorized charges on mobile phone bills; and 4) assisted and facilitated in the sending of illegal robocalls.

Settlement:

  • This particular group of defendants must pay the FTC $7.8 million.
  • Under the terms of the settlement, defendants are banned from sending consumers unwanted text messages, as well as placing charges of any type on consumer telephone bills (whether landline or mobile).
  • Further, defendants may not misrepresent whether a product is free (through text message or webpage), and must make sure that all of their affiliates abide by the same restrictions.
  • The settlement also requires defendants to obtain consumer express informed consent before billing consumers, and bans defendants from participating in illegal telemarketing on a prospective basis.

Second Set of Defendants

FTC Complaint:

  • The FTC alleged that this group of defendants was responsible for cramming unauthorized charges on consumers' mobile phone bills.

Settlement:

  • Under the terms of this settlement, defendants are required to pay $1.4 million.
  • They are banned from placing charges of any type on consumer telephone bills, and may not make any misrepresentations about a product or service, including the cost or a consumer's obligation to pay.
  • Further, defendants will be required to obtain a consumer's express informed consent before billing them for any good or service in the future.

Third Set of Defendants


FTC Complaint:

  • The FTC alleged that this group of defendants was responsible for making "millions" of illegal robocalls.

Settlement:

  • Although the settlement resulted in an $8 million judgment, it is being suspended due to the defendants' inability to pay, after they turn over certain of their available assets.
  • For instance, defendants are required to pay the FTC $100,000, as well as the surrender value of a life insurance policy and proceeds from the sale of the following items: a 2013 Cadillac Escalade, two motorcycles, and real estate in Southern California.
  • The settlement also bans the defendants from engaging in any future illegal telemarketing.

Take Away:

  • These massive settlements reflect the FTC's continuing efforts to prevent the sending of deceptive and unwanted text messages, cramming and illegal robocalling.
  • Companies who market products or services via mobile devices must pay close attention to applicable mobile marketing guidelines, rules, laws and regulations.
  • As we can see from the FTC's efforts, federal regulators are working to protect consumers and to ensure that all marketing entities are in compliance with applicable law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.