FTC settles with Florida company over 42 million fraudulent texts

This settlement comes as part of a larger crackdown on text message fraud

Hey, would you like to win a free gift card worth up to $1,000? All you need to do is respond to a text message… with your name, social security number and credit card information.

If that sounds sketchy to you, the Federal Trade Commission (FTC) agrees: It settled charges on Sept. 17 with a Florida company that sent out more than 42 million unsolicited and deceptive text messages to consumers promising free gift cards.

The FTC required Rentbro, and its two top executives Daniel Pessin and Jacob Engel, to turn over the company’s assets and pay back $377,321, the amount the business had collected from the scheme. According to the New York Times, the FTC charged Rentbro and its executives with unfair or deceptive acts, a violation of the Federal Trade Commission Act.

The Times reports that FTC Midwest Director C. Steven Baker claims the agency had received fewer complaints about Rentbro’s unwarranted texts since filing the cases.

In March, the FTC instituted a host of new rules governing privacy on mobile devices.  Among the instituted rules are that compliance with FTC rules must be visible on a webpage (and not in a hyperlink) if a company’s website does not default to a mobile setting. In Rentbro’s case, the website that the fraudulent texts directed customers to contained none of the requisite compliance information.

The commission has also recently cracked down on other instaces of text message fraud, filing eight cases against 29 plaintiffs from around the country for sending fake offers via text. One of those cases has already been settled, as the FTC received $60,950 from Henry Nolan Kelly, an Internet marketer accused of fraudulently offering new iPhones via text.

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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