Fake Walmart, Best Buy And Target Offers Lead To FTC Crackdown

Fake $1,000 gift-card offers that were supposedly from Walmart (NYSE:WMT), Best Buy (NYSE:BBY) and Target (NYSE:TGT) have been shut down by the U.S. Federal Trade Commission, the Wall Street Journal reported.

According to the FTC, a Florida company called Rentbro Inc. allegedly sent out more than 42.5 million unwanted and deceptive text messages to consumers, saying they were chosen to receive $1,000 gift cards from major retailers. In each case the consumers were asked for personal information and instructed to sign up for trial offers, none of which were free, in order to to receive the gift card.

In March, the FTC sued 29 defendants over a total of 180 million bogus offers that promised free gifts, prizes or gift cards. Rentbro was allegedly responsible for about one quarter of the fake offers. The Rentbro settlement requires the company to turn over its remaining assets to the FTC.

That won't be much help to any of the consumers who were suckered into the scheme by the names of the big retailers. It won't help Walmart, Best Buy, Target or the other retailers whose names were used by the scammers. Those are still the retail names that consumers will connect with the scam.

That points up the fundamental problem with text-message marketing for retailers: While it's the simplest and most universal form of mobile marketing, it's also the easiest to abuse. With apps or mobile websites there's a much smaller chance that a scammer has gone to all that trouble. But a text could have come from anywhere, and a scammer doesn't even have to fake the "From:" line in an e-mail.

The other problem, of course, is that some people receiving the texts will have to pay for the privilege. That's what gave the FTC the legal foothold to go after these scammers—the fact that the text messages were unwanted as well as deceptive—but it also provides the FTC with an excuse to subject legitimate retailers to much closer scrutiny. Despite texting's convenience and wide reach, at this point it may just no longer be worth the trouble.

For more:

- See this Wall Street Journal story

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