FTC charges scam gift card sites $2.5 million

The Federal Trade Commission announced Tuesday that it has reached $2.5 million in settlements with individuals operating scam websites offering “free” gift cards.

According to the agency, 12 defendants were behind millions of spam text messages that promised free gift cards to major retailers and directed recipients to a scam website.

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The first websites recipients saw required them to register — allowing the sites to collect and sell users’ information — before they were taken to a second website, where they had to “complete a number of ‘offers,’ many of which involved either paid subscriptions to services, or applying for credit,” the agency said.

Under the terms of the settlements, the defendants are prohibited from sending spam text messages, misrepresenting goods and services as “free” and using deceptive methods to collect and sell consumer information.

Also under the settlements, the defendants must destroy the personal information they collected from users through the scam websites.

“This case halts a nationwide operation that took in millions of dollars by promising consumers free gift cards that it never delivered,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. 

“We’re pleased to stop these unwanted messages and protect consumers’ personal information,” she said.