(WKBW release) New York Attorney General Eric T. Schneiderman recently announced a settlement with Game Theory LLC, a mobile-content corporation based in San Jose, California following an investigation that revealed the company was sending spam text messages to New Yorkers and then tricking them into signing up for texting services.
According to the news release from Schneiderman's office:
Game Theory has agreed to reform its business practices and pay $500,000 in penalties for deceptive and fraudulent advertising of its premium text message service. The Attorney General also provided consumers with tips on how to avoid texting scams.
"There is no legitimate purpose for scams that deceive New Yorkers, and we will continue the fight to protect people's privacy and their hard earned money," said Attorney General Schneiderman. "As a result of this settlement, Game Theory is out of the texting business for good, and this corporation will be held accountable for its conduct."
The Attorney General's investigation found that Game Theory sent deceptive text messages to New Yorkers' tricking them into signing up for monthly text messages at a cost of $9.99 a month. These charges appeared on the victim's wireless telephone bill in a way that was difficult to detect. For months, consumers would pay for text messages they did not want before they realized they were being charged.
For example, between May 23, 2011 and July 5, 2011, Game Theory sent text messages claiming that the recipients had a "secret crush," and that the recipient needed to respond "yes" to find out who it was. However, in the process of finding out the identity of the "secret crush," the recipient was also unknowingly signing-up for a text message service to receive dating tips for $9.99 a month.
Game Theory also sent similar messages in an effort to sell their text messages including "Someone thinks your hot!," "You have 1 unread message," and "Someone sent you a weird diet tip that works."
In total, over 150,000 of these deceptive text messages were sent to wireless telephones in New York.
In another scam, Game Theory promoted a wireless telephone application that allowed users to manipulate or "morph" their personal photos. However, during the installation of the software on the victim's wireless telephone, victims were again tricked into signing up for text messaging service for $9.99 a month.
Game Theory's deceptive practices violated the General Business Law (Article 22-A) and Executive Law § 63(12).
As a result of the Attorney General's investigation, Game Theory, which was recently acquired by a third party, has agreed to exit the text messaging business and pay $500,000 in civil penalties to the State of New York.
In order to protect consumers from these types of scams, Attorney General Schneiderman recommends:
. Never respond to unsolicited text messages, even those that read "reply 'STOP' to avoid charges."
. Advise family members, especially children, that responding to text messages, email or television commercials that advertise services such as joke-of-the-day texts, horoscopes, love advice, and ringtones will incur charges that may be difficult to rebut.
. Find out if you are currently being charged for unwanted cell phone services by carefully checking your next phone bill. Look for terms such as "premium content" or "direct bill charge," which are often used to mask unwanted charges.
. Call your cell phone service provider and ask them to block any and all third party charges going forward.
. Never click on web links in unsolicited text messages. Links are most often provided in fraudulent messages that claim the recipient has won some contest or prize.
. Discuss these tips with all family members who have access to a cell phone. Deceptive cell phone practices often target younger users.