FTC cracking down on spam text messages

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The Federal Trade Commission has filed complaints against 29 affiliate marketers, accusing them of bombarding consumers will hundreds of millions of text messages that falsely promise free gift cards to major retailers.

The FTC said the spam not only was misleading but consumers’ information was then sold to third parties. Many consumers also ended up paying for the text messages.

“The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target,” the FTC said in a statement. “Consumers who clicked on the links in the messages found themselves caught in a confusing and elaborate process that required them to provide sensitive personal information, apply for credit or pay to subscribe to services to get the supposedly “free” cards.”

An affiliate marketer is a company that pitches a product or service for another company. The marketers usually receive a commission based on a sale or lead generated.

The FTC said the marketers were paid by the operators of the gift websites based on how many consumers eventually entered their information. The operators of the gift websites were then paid by those businesses who gained customers or subscribers through the offer process.

Acting FTC Director Charles Harwood called the text messages “garbage” and said consumers who get the spam should delete them immediately.

The affiliate marketers allegedly were in violation of FTC rules requiring them to tell consumers about conditions attached to the free gifts, including the possibility that consumers would actually be required to spend money to receive the gift.

Are you bombarded with text messages offering free gifts?

One comment Add your comment

Don't Tread

March 7th, 2013
2:53 pm

Commercial text messages should be banned entirely, except in cases where the consumer has specifically opted IN to receive them.

We need a “do-not-text” law with severe financial penalties for noncompliance.