Architecture, Application Security, Network security, Threats, Cybercrime

FTC fights to shut down text message spammer

February 25, 2011

The Federal Trade Commission (FTC) has asked a federal judge to shut down a spamming operation that sent millions of text messages advertising debt relief and loan modification services to U.S. consumers.

The protection agency normally brings complaints against email spammers, but this appears to be the first such action against a junk mailer using SMS to push their bogus services.

The defendant behind the operation, Phillip Flora of Huntington Beach, Calif., sent more than 5.5 million unsolicited text messages, sold consumers' wireless numbers to third parties and advertised his services, according to a complaint filed by the FTC on Tuesday.

The FTC also has asked the court to freeze Flora's assets.

Over the course of the spamming operation, which began Aug. 22, 2009, Flora delivered 85 text messages per minute, each minute of every day, according to the FTC. Many consumers were stuck paying fees to their mobile carriers for the unwanted messages.

The messages directed consumers to the website Loanmod-gov.net, which was unaffiliated with any government entity but touted itself as a source of “official home loan modification and audit assistance information.” The site, no longer live, requested consumers provide personal information about their mortgages that would supposedly be used to perform a loan audit.

Flora collected the numbers of those who responded to his unsolicited messages – even those who responded negatively and asked him to stop sending messages – then sold them to marketers, claiming they were “debt settlement leads,” according to the FTC.

Many of those who requested Flora stop contacting them continued to receive messages, the FTC said. 

Flora also allegedly advertised his services via email, offering to transmit commercial text messages to consumers on behalf of third parties for a fee.

In his advertisements, Flora said he maintained a database of 100 million cell phone numbers and was able to send out 200,000 text messages per day. He promised a return of at least one lead per 1,000 messages sent and offered his services for $200 per 50,000 messages or $300 per 100,000 messages.

According to the FTC, Flora violated the CAN-SPAM Act, which, among other things, prohibits not allowing consumers to “opt-out” of receiving future communications. In addition, the compliant said, Flora violated FTC regulations by sending unsolicited commercial text messages to consumers and misrepresenting that he was affiliated with a government agency.

As of Friday afternoon, Flora had not responded to an email interview request made by SCMagazineUS.com and was unreachable by phone.

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