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FTC settles with SMS marketer over spam allegations

The Federal Trade Commission (FTC) has settled its first-ever case against a text message spammer.

The agency announced Thursday that the settlement with the defendant, Phil Flora, bans him from sending or aiding others in the delivery of unsolicited text messages that promote a commercial product. In addition, he must pay $32,000 to satisfy a judgment.

Flora of Huntington Beach, Calif. is alleged to have sent a "mind-boggling" amount of spam SMS, according to a complaint filed in February by the FTC. Specifically, he delivered more than 5.5 million unsolicited text messages, sold consumers' wireless numbers to third parties and advertised his services.

He could not be reached for comment on Thursday.

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 texts directed consumers to the website, 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.

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.

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