Firm That Sent 42 Million Texts Settles in Spam Case
John Gress for The New York Times C. Steven Baker, left, of the F.T.C. says complaints have gone down since a crackdown this year on fraudulent text messages.
WASHINGTON â€" The Federal Trade Commission said on Tuesday that it had settled charges against a Florida company and its two top executives for sending more than 42 million unwanted and deceptive text messages to consumers.
Messages sent by the company had promised free gift cards worth up to $1,000, the commission said, but when consumers tried to visit a Web site to collect the prize, they were instead connected to a site that asked for personal information, like Social Security numbers and credit card numbers. It also required them to pay for additional services to receive a gift card.
The company, Rentbro, and its principals, Daniel Pessin and Jacob Engel, both of Fort Lauderdale, Fla., were required to turn over remaining assets and to repay up to $377,321, the amount the business had collected.
The settlement came as part of a sweeping crackdown on text message fraud that the commission announced in March. The agency filed eight cases in February and March against 29 companies and individuals around the country, accusing them of sending text messages with fake offers.
Those companies sent more than 180 million spam text messages, which typically offered gift cards to national chain stores like Best Buy and Walmart.
C. Steven Baker, director of the commission’s Midwest region, said that since the agency had filed the cases, it had received many fewer complaints about such offers.
The commission charged Rentbro and the two executives with unfair or deceptive acts, in violation of the Federal Trade Commission Act. The parties agreed to the settlement but did not admit or deny wrongdoing.
Gregg E. Pessin, a lawyer in Coral Gables, Fla., who is listed in Rentbro’s corporate filings as the company’s registered agent and who said he was the father of Mr. Pessin, said the company and the two men would not comment on the case.
The Rentbro case was the second of the cases filed this year to be settled by the commission. In July, the agency assessed a penalty of $60,950 against Henry Nolan Kelly, who the commission said had sent more than 20 million unwanted text messages offering free iPads and iPhones to people who clicked on the Web link.
The financial judgment against Mr. Kelly was suspended because of his inability to pay. He agreed to cooperate with the commission in future investigations and to refrain from sending unwanted or deceptive text messages.
A version of this article appears in print on September 18, 2013, on page B2 of the New York edition with the headline: Firm That Sent 42 Million Texts Settles in Spam Case.
