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July 19, 2013

FTC Settles with Text Message Spammer

Seller Beware: Consumer Protection Insights for Industry,

As we've previously reported, the FTC has a distinct distaste for those who blast sham spam offers to unwitting consumers via text message. In March, the Commission filed a series of complaints against individuals and companies allegedly engaged in sending these unsolicited messages to consumers all across the country. According to the FTC, the messages promised consumers free gift cards or expensive gadgets in return for a few clicks through a variety of websites. Unfortunately, according to the Commission, the sites often requested extensive personal information from the consumer, and often required the purchase of paid subscriptions in return for the promised gift.

Henry Nolan Kelly was one of the individuals targeted by the FTC during its March Anti-Spam Madness. Kelly settled with the FTC this week in a stipulated final order that prohibits him from having anything to do with sending unwanted text messages or misleading consumers about winning gifts or prizes through text messages. The order also imposes a fine of $60,950, which is suspended due to Kelly's inability to pay the fine.

It's clear that the FTC means business when it comes to cracking down on text message spam shams. Sellers are cautioned to use care when offering anything "free" to consumers. As we've blogged about here and here, the FTC has guidelines concerning the use of the term "free." The guidelines warn that any offer of "free" merchandise or services must be made with care so as not to mislead or deceive customers. Based on the complaints arising out of the alleged spam shams, we have a feeling that the Commission won't shy away from bringing unfair practice charges against those who don't comply.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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