Striking another victory for consumers, the FTC recently announced that they’re cracking down on the text message spammers behind sites like TargetContests.com, BestBuyWin.net and PrizePatrol.net/Walmart.
Each of these text message campaigns (and countless copycats) told consumers they’d won a free $1000 gift card, but an attempt to claim the prize only led victims through a twisted web of free trial sign-ups and misleading product offers.
“Free gift card” text messages drew so many complaints on Scambook that we named them our #1 Scam of the Year. It’s estimated that spammers sent over 180 million texts.
We weren’t the only ones paying attention to this consumer threat. Charles A. Harwood, Acting Director of the FTC‘s Bureau of Consumer Protection, took an aggressive stance against unsolicited texts.
“Today’s announcement says ‘game over’ to the major league scam artists behind millions of spam texts,” he said in a press release. “The FTC is committed to rooting out this deception and stopping it.”
Harwood called the text messages “garbage” and advised cell phone owners to delete them immediately.
Cell Phone Smishing (SMS Phishing) in Review
The text message spam targeted by the FTC is a type of fraud scheme known as smishing, for SMS (text message) and phishing. The goal is to get your personal or financial information by tricking you with a text.
Some smishing schemes impersonate your bank, asking you to unlock a “frozen” checking account by texting back with your routing number. Others threaten cell phone owners with violence. One Australian scammer told his text message victims that he’d been paid to kill them if they didn’t cough up a higher price.
But the most widespread smishing campaign blasted users with a text like this: “Your entry last month WON! Go to TargetContests.com enter winning code 3847 to claim your FREE $1000.00 Target gift card within 24hrs.”
The scheme came in bigger and bigger waves. First, the texts lured consumers with Walmart gift cards. Then, they used Best Buy. By early November, Target became the bait and the texts ran rampant. Our data tracking showed that the scam peaked during the height of the holiday shopping season — exactly when shoppers could use an extra $1000 the most.
Unfortunately, the spam recipients couldn’t give their families an extra $1000 worth of Christmas presents. The gift card offer was a ruse. The spammers used it as bait to draw consumers to some very suspicious websites.
No Gift Card at the End of the Survey
We received a number of these texts ourselves and followed the links. They lead us to websites that mimicked the retailer’s branding to a tee; they looked legit. But when we tried to claim our “free” gift card, we experienced what the FTC describes as “a confusing and elaborate process”:
When consumers followed the links included in the unwanted messages, they were directed to sites that collected a substantial amount of personal information, including in some instances health information, before being allowed to continue toward receiving the supposed gift cards. In many cases, the information was requested under the guise of being shipping information for the supposed gift cards.
Once consumers entered their personal information, they were directed to another site and told they would have to participate in a number of “offers” to be eligible for their gift card. In some cases, consumers were obligated to sign up for as many as 13 of the offers. These offers frequently included recurring subscriptions for which consumers were required to provide credit card information. In other cases, they required consumers to submit applications for credit that would be reflected in their credit reports and possibly affect their credit score. If a consumer completed all of the “offers,” they were then notified that to get the promised gift card, they had to find three others who also would complete the offers.
The FTC also stated that the information these sites collected was then allegedly sold to third parties and used for marketing purposes.
In other words, consumers wouldn’t get a $1000 Walmart gift card. They’d get junk mail, telemarketing calls and even more spam texts.
The FTC Takes Action and Fights For Consumer Justice
The FTC has charged 29 defendants and filed 8 complaints against the alleged senders and their affiliates. The Commission alleged that defendants violated the FTC Act by deceiving consumers. From the press release:
The FTC alleged that the operators of these sites violated the FTC Act by failing to tell consumers about all the conditions attached to the “free” gift, including the possibility that consumers would actually be required to spend money to receive the gift.
The Commission’s complaints seek restraining orders against the defendants preventing them from continuing their alleged deceptive and unfair practices as well as preserving and accounting for their assets.
The cases will be determined in court. In the meantime, the FTC’s restraining orders should put an end to those unwanted texts for good.
The End of Free Gift Card Text Messages?
What do you think? Is this really the end of those annoying spam text messages, or will different spammers continue to carry the free $1000 gift card torch? Share your thoughts in the comments.