The Federal Trade Commission added new charges of mobile cramming to a complaint filed against an operation that allegedly sent millions of unwanted text messages and robocalls to consumers.
The amended complaint adds the mobile cramming charges to the FTC'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.
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.
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 new defendants include: Scott Modist, Joshua Greenberg and Gregory Van Horn. All three are named individually and as officers of Acquinity Interactive LLC. Modist and Greenberg also are named as officers of 7657030 Canada Inc.
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.
Consumers also 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.