FTC and Text Message Marketers

As detailed in this Tuesday’s blog post, the FTC recently filed a lawsuit against SubscriberBASE, All Square and several other defendants for using unsolicited text message marketing services to drive consumers to their websites.  It is now clear that in addition to suing the parties operating the websites, the FTC is targeting the third party text message marketers utilized by the websites.

New Lawsuits

In 7 new complaints filed against 19 alleged senders of unsolicited text message spam, the FTC alleges that the defendants sent more than 180 million unwanted text messages to randomly selected consumers, 12% of whom had to pay to receive the texts.  The text messages promise consumers free prizes for clicking on the link included within the message.  Once the consumer follows the link, they are taken to a website and through an elaborate process in which they are asked to provide personal information or sign up for other services before receiving the promised prize.  According to the FTC, because the text message marketers were paid by the website operators based on how many consumers entered their information and failed to disclose the conditions of receiving the prizes, they should be held liable for deceptive advertising practices, along with the website operators. Additionally, the FTC claims that the text message marketers should be held directly liable for the consumers being charged a fixed fee for receiving the text messages.

Same Consequences

The FTC is seeking similar relief to that sought from SubsriberBASE and All Square, namely  to rescind any consumer contracts and reimburse their out-of-pocket expenditures; disgorge the defendants of all ill-gotten monies; and recover the FTC’s costs of investigating and bringing the action in Federal Court.

The final outcome of these cases should be of interest to text message marketing companies and those generally interested in the Internet and mobile marketing spaces.

If you are interested in learning more about this topic or pursuing a text message-based advertising campaign, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.

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David Klein

David Klein is one of the most recognized attorneys in the technology, Internet marketing, sweepstakes, and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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