A Funnel ... a Wall ... a Consent Farm: FTC Targets Weak Spammer Excuses

"McIntosh .... the Edsel .... Dolly Parton!" (An envelope containing a question is side-torn and blown open.) "Name an apple, a lemon, and a pair."
-- Carnac the Magnificent, as portrayed by Johnny Carson

The soothsayer or "Answer Man" comedy act tries to short-circuit expected logic, working best when its curt answers are misleading and the corresponding hidden questions don't match a presumed context. It also mocks the 'omniscient wizard' characters found in old stage magic acts which simulate prediction. As Penn & Teller: Fool Us acts demonstrate weekly, "free choice" must be carefully steered and manipulated for the gimmick to function, while convincing an audience that the magician providing that choice can be trusted to avoid such granular control. "Is this your card" is a finishing question with an answer locked down before the nimble-fingered performer walks on stage.

Not so amusing is when someone is misled through a backwards questioning process to be drained of money and sanity by career criminals, rather than charmed by a benign fraud. Overnight I read a fresh Federal Trade Commission complaint against some infuriating illusionists, charlatans with a science, who craftily convert your dreams of success into telemarketing nightmares of exploitation. The damage runs to nine counts for disobeying CAN-SPAM, the FTC Act, and the Telemarketing Sales Rule across a dozen or more years.

I've posited the above analogy to stage prediction because I'm frankly worn out right now. Trying to condense this fraud operation to a single little article feels like cramming smoke into a bottle with a leaf rake. Please forgive as I hew to the highlights, and do sit with a snack and a copy of the complaint yourself, linked below.

On defense are marketing firm Fluent, LLC, subsidiary RewardZone USA, and a pile of aliases and subsidiaries including Deliver Technology, Ease Wins, FindDreamJobs, Flash Rewards, JobsOnDemand, Level Up Rewards, National Consumer Center, The Reward Genius, Search Works Media, and StartACareerToday. Most are Limited Liability structures and all are housed in the same New York City office. As you might be gathering from those trade names, the Fluent gang attracts victims with various offers of cash prizes, gift cards, trendy merchandise, and employment. They and their innumerable "publisher" partners advertise by email, SMS, and online display ads and videos.

The various lures refer marks to Fluent's lead generation websites, ostensibly to claim those hot prizes and jobs, often supposedly from Amazon, Disney, Google, McDonald's, Walmart, Verizon, YouTube, FedEx, and UPS. Said companies have seen their logos borrowed and their names invoked without permission or notice, and have, several times over and to no avail, aimed protest directly at Fluent for trademark abuses.

The next part of the business model is nothing new, forming a painfully familiar pattern among teasing commercial offer schemes. Once "landed" on whatever Fluent website applies, the hopeful claimant is dragged through a senseless gauntlet of questions and polls and demands for personal data. If those are survived, the heavily probed reward claimant is made to submit to a dizzying series of goods and service offers, often creating several negative option "trial offer" commitments which can't be broken with a mallet. Job seekers find themselves completing nosy forms which lead to more vague employer exposure offers, which require the same or more personal data, which triggers more offers, and so on like a toilet swirl.

The process typically plays like some demonic version of The Price Is Right where item prices change wildly every eight seconds, the prize cars are all painted tin foil, the giant vertical wheel always breaks a dollar, the Plinko chips are all magnetized, the Range Finder's red window is only an inch high, and the Yodeling Man can't wait to fling himself from that snowy cliff. Also before the credits, Drew promotes mass pet fornication. Point being, it's constructed to grant an illusion of user control but rigged for inevitable failure. Fluent's victims waste days and weeks chasing the initial teaser and may spend more than the reward is worth to arrive empty at Square One.

Within three years studied by the FTC, "only 0.00402% of consumers who registered on a Fluent rewards site succeeded in obtaining the reward that attracted them to these sites in the first place and induced them to compromise their privacy. Put another way, that’s 7,527 people out of the 187 million who provided their personal information by registering on one of Fluent’s sites. Moreover, just 12.36% of consumers who registered on a rewards site during the same time period completed a single deal, and only 1.44% completed two deals". Really, if you want to gamble so badly, even a dumb twenty dollar lottery scratcher pays a long term thirty percent return.

As you might be thinking from my recall of an old Carnac joke, those rarely attainable offers are merely a distracting means to an end, and the only consistent prize winners are Fluent and friends, who "have aggregated and sold consumers’ information to their clients, [and] used that information to inundate consumers with telephone, text message, and email solicitations about a multitude of products and services, including pain cream, for-profit education, insurance products, solar energy, extended auto warranties, debt reduction, medical alert devices, and more."

Damn, son, what more do you need? They sweep about all the top categories for illegal sales calls. That's just from the goodie prize side of the office. From the job offer side, one can expect a deluge of anything but jobs, including pitches from "insurance brokers, political organizations, for-profit educational institutions, other lead generators, and sellers of miscellaneous products and services such as home security and pain relief".

"Hold the phone", you say in a devil's advocate mood, "don't these Fluent fellows nail down the almighty Prior Express Written Consent to make those huckster calls while site users struggle with endless invasive questions?" Why yes, I reply, that's the tacit function of those lead-gen sites, "qualifying" them for anyone who buys the leads. "I know you're making air quotes with your fingers", you retort, "why don't you tell me how you mean the opposite and therefore why the FTC's undies are bunched." Okay, I'll quote the complaint again:

    "Defendants’ lead generation websites have employed a variety of deceptive design techniques, commonly known as “dark patterns,” to manipulate consumers and undermine their ability to make informed choices about their personal information. "

All through the polling and entry field gauntlets are strewn disclaimers and notices about what happens when you click an "approve" or "enter" or "confirm" or "continue" gadget. Mainly they force surrender of the user's rights not to be hassled by ambush sales calls and emails from unnamed sources, which might be otherwise barred by DNC registration and the TCPA. The complaint goes on to critique the design and layout of these lead-gen pages, placing disclaimers in tiny low-contrast text and sometimes falling outside the screen border. They also make 'action items' and prize imagery very large and colorfully prominent, maybe adding arrows and lines and whatever else compels the eye to follow a desired path right past the critical text. These too are not new or exotic features of lead-gen teaser traps. TV and print ads had long ago perfected visual distraction from burdensome inserts.

The user in less of a hurry might notice the one embedded hyperlink to the list of potential "marketing partners", itself a low contrast yard-long pile of tiny names, many of them inscrutable "acronyms and generic DBAs, such as “CAC,” “RMC,” NAMC,” “EarnMore,” “Prize Centr,” and “SaveToday,”, and many each fronting several more sub-partners and call centers which no one requires to suit the parent's name. As a work of disclosure, I'd sooner see George Santos offer a House bill entirely through interpretive dance, a sincere (if ghastly) compliance effort by comparison.

For other laughs the complaint mines the hopeless legal Compliance Theater posture of the whole Fluent team, who actually paid an outside compliance monitoring firm to be blithely ignored. The watchdogs did their jobs of raising numerous "gotchas". Fluent execs waved off warnings with a smirk and mainly negotiated mild compromises with violating publishing partners, when challenges were made at all. Read as, "We heard the complaint and we did something about it; nobody said it had to be the right thing".

Testimony from Fluent’s general counsel echoes the "light touch regulation" which Ajit Pai used to promote at the FCC:

    When asked if Defendants had conducted any testing to determine whether consumers are aware of what they are agreeing to, he responded:

    "Can you explain to me what element of the TCPA requires that consumers be aware that they've given consent? ... I can only assume that most consumers, if they're not aware that their [sic] doing something, they should be aware that they're doing something."

Pardon my speechless pause.

That inarticulate goons can pass a Bar exam is bad enough. But to shave down the meaning of "consent" to Blind Man's Bluff astounds me. Nolo's law dictionary is more certain of the term: "voluntary agreement by a competent person to another person's proposition". When the "proposition" is glossed over or hidden, the "other person" is anyone's guess, and the "agreement" was only "voluntary" because demands for agreement are mandatory, from where in that mess do you extract genuine consent?

Fluent's legal brain trust really thought it was cute to paint their scheme to resemble a science. The FTC said they made a style guide presentation ...
    articulating a "general principle of advertising law" identified as "Funnel Theory." [This] stands for the proposition that disclosures must be "more comprehensive and clearer" as consumers move closer to the point of purchase. For this reason, the presentation asserts, banner ads and emails "can be more aggressive and ambiguous than a landing page." Legally, this is not correct

I'll give it to them, The Funnel is an apt visual aid for what operates like a lion ant trap. The skinny end of the Funnel dumps site users before the so-named "Deal Wall". If you thought I was overdoing my game show analogy, go on and read the "Deal Wall" complaint section. Have some headache pills ready for the convoluted path described for earning that elusive reward.

The FTC coins its own keen turn of phrase for this kind of scheme, which I hope they can trademark and milk for royalties:
    The purported agreements generated from these "consent farm" websites are a crude attempt to circumvent the TSR's requirement that, to initiate a robocalls [sic], the specific seller obtain consent directly from a consumer, and only after providing clear and conspicuous disclosure.

Right there has been the logic hole which sinks this boat. Any busking fools can purchase a sales lead, but they cannot by a wild bank shot inherit a right to blast canned calls and text messages.

Bonus points to everyone who got an itchy feeling of familiarity from the wobbly consent laundering. We saw several of the same issues a few weeks ago in the FCC's deathwatch over spam-happy Avid Telecom and Mike Lansky.
    https://800notes.com/forum/ta-1e339d9cb57b1df ... 783507073873490

. . . . . . . . . .

United States v. Fluent, LLC - CourtListener
US sues 'consent farm' operator for 'massive' telemarketing deception - Reuters, 17 Jul 2023

. . . . . . . . . .

Answer Man's Question for my thread title: Name three places you can drive two-legged cattle nine kinds of crazy.

Yeah, I didn't think it was funny, either. I did say I was tired.

The FTC is close to spanking another rotten telemarketing gang after an oddly long four year haul to summary judgment. No one in the available filings or press releases has used the term "consent farm", but on a simpler scale the case elements are similar enough to the Fluent case that I figured appending this thread wouldn't hurt.

Defendants Day Pacer and EduTrek of Utah have long sold sales leads to colleges and vocational schools, mainly through a whole bunch of bait-switch websites managed by themselves and also some South Asian telemarketing partners. I suppose they figured to attract a suitable market population with anything but mention of returning to school. The various websites promised assistance with military recruitment, job placement, get-rich schemes, and obtaining government relief and benefits. All roads led to a trio of sales slobs whose one aim was to convince people trying to improve their lives that what they really needed was a boat anchor of student debt.

Following the consent farm playbook, a recurring obnoxious feature of these baiting websites was the collection by entrapment of permissions to bomb the applicant with sales calls. The tick boxes were usually pre-selected to favor the spammers, and often attached to absurdly unrelated action items, such as confirming that you're an adult US resident. Oh, they'd say that consent to spam wasn't required, while providing no obvious means to avoid that outcome. Like others playing these games, the website designs were user-hostile, deploying disclosures in low contrast and small type sizes. When you could find them, hyperlinks to mushy lists of the dozens of marketing partners conveniently failed to refer to the client schools or properly identify the spam gang.

The FTC found the defendants pestering Do-Not-Call registrants about a quarter of the time, having never bothered to purchase list access or scrub their dialers. When marks on the phone declared their total disinterest in the school pitching, call center grubs had orders to softsoap the friction by first repeating the objections, then press on anyway with selling college. (Translated: I hear you, I feel your pain, I have the answer to what you're afraid to ask .... BLEAH!) When called parties got angry and threatened to sue for the unwanted calls, Team EduTrek yawned and kept the dialers hot. The judge's order last month describes equal resistance from their own clients, whose worries were also ignored:

Quote:

Defendants also received complaints from schools and other lead purchasers and their compliance companies that they were initiating calls to consumers without collecting proper express written authorization to be contacted. At least one major lead purchaser ... refused to work with the LLC Defendants because it was concerned that their consumer data sources, such as websites, did not properly collect consumers’ consent to be contacted.

Let's not fail to mention these are sneaky offenders whom the FTC began investigating a couple of years into their racket in 2016. One of the principals "told the FTC that EduTrek was dissolved, but did not mention that Day Pacer was operating the same business out of the same location with most of the same employees." Soon the unmentioned company sprouted two more telemarketing nests "using Day Pacer employees", likely a diffusion tactic to fool the watchdogs.

The defense team has flapped in the wind, trying to claim First Amendment high ground and denigrating the Telemarketing Sales Rule (TSR) as "unconstitutional". They whined that the DNCR lists only phone numbers and no attached subscriber names, suggesting that no one really knows who if anyone was harmed by the call blasting. The judge was having none of this ignorance of public policy:

Quote:

... telemarketing calls that interrupt a registrant's privacy at home are not somehow less of an invasion if the registrant's family member picks up the call than if the registrant does so. Indeed, the FTC explicitly considered the issue of households with multiple phone users and determined registering phone numbers is necessary to "accomplish its privacy protection objectives," noting that members of one household with differing interests in receiving calls could obtain more than one phone line or provide express authorization to specific telemarketers.

Beautiful ... That clicks into slots of my own litigation sentiment when arguing that I was firmly planted in a "zone of interest" when taking garbage phone calls on behalf of their intended targets, my declining parents. I'm also delighted to see support for a "sins of the father" theory we've nursed on 800Notes a few times before, with regard to the near-Hobson's Choice to be transferred from the teaser to a sales agent.

Quote:

... in further support of their consent argument Defendants point to the fact that consumers consented to their calls being transferred between the dialing vendors and Day Pacer and therefore they could have avoided the call. But by that point, the train had left the station. The dialing vendors had already initiated a call to a number on the Do Not Call List. Whether the consumers then agreed to be transferred does not show that the dialing vendors somehow had consent to call the consumers in the first place.

The judge sounds eager to grant all the relief the FTC has requested, but time enough has passed to merit study of what the defendants are up to and what funds remain to seize. For breaking the TSR alone ...

Quote:

... the FTC seeks an award of civil penalties in the amount of $28,681,863.88 -- "substantially less than the maximum allowable civil penalty that is in excess of $100 billion." This works out to $6.88 per call for 4,168,511 violations. The FTC explains that the $28.6 million figure is "equal to Defendants' gross revenue during the applicable period"

. . . . . . . . . .

Court Rules in FTC's Favor in Case Against Telemarketing Company that Bombarded Job Seekers with Millions of Illegal, Unsolicited Calls - FTC press release, 13 Oct 2023
FTC Charges Telemarketing Operation with Misleading Job Seekers and Making Millions of Illegal, Unsolicited Calls - FTC press release, 12 Apr 2019

"Excellent!"

- Montgomery Burns

An epilogue to the EduTrek / Day Pacer case was filed last week and announced yesterday. The FTC is to collect every cent it requested atop injunctive relief as laid out months ago. Day Pacer's crew must now stay clear of cold sales calls for life. The delaying wrinkle was that one of the company's principal trio had escaped the ban on telemarketing, mainly by dropping dead after the summary judgment review and his estate became the new defendant.

The estate tried to reprice its share of the monetary penalty, asking to pay a pitiful twelve cents per call, versus the already modest $6.88 waiting in the proposed Order. Recall that the $28.6 mil was meant to only deny ill-gotten revenue. It wasn't extra cream, and I infer that the judge couldn't see how scraping off a layer to spare an inheritance was fair to the public interest.

Summary judgment, for those of you not in the habit of visiting courtrooms, is commonly sought by plaintiffs who believe (on paper at least) that their case is so easy or well-pled that the defense might as well surrender early. Beating SJ entails exposing major flaws in the plaintiff's claims, thus keeping the "controversy" alive. The FTC attorneys typically have already done exhaustive homework and are confident of a win before tapping in the DoJ.

. . . . . . . . . .

Court Finalizes Injunction and Monetary Judgment against Illegal Telemarketing Operation and its Owners - FTC press release, 31 Jan 2024
EduTrek, LLC case landing page

FTC Shakes More Consent Farmers from a Response Tree

The FTC is working on starving the crops of yet another bunch of sales call consent farmers, Response Tree in California. Active in the past five years and sued a month ago, they are slightly better known for their fraud-fertile websites, including AbodeDefense.com, AgedPeopleMeet.com, ClickToWinAChance.com, PatriotRefi.com, TheRetailRewards.com, and some four dozen others. Tellingly, these domains went hurriedly dark once Response Tree got wind that the Feds had begun investigating them, but not before the FTC had collected damning screen caps.

The FTC's complaint describes what has become a reliable pattern. The defendant's websites enticed people to surrender private data on the premise of exposure to whatever category of service provider. Said websites carried easily missed piles of disclosure text and affiliate names, set too small for a field mouse to read comfortably, which mush-mouthed the actual purpose of capture. Data were sold off to unrelated parties, most often resellers themselves. Before long, data donors were pelted with cold phone calls selling just about anything except what they'd wanted from those websites, "including solar panels, hearing aids, auto warranties, and Social Security disability services", per the FTC's findings.

When Federal snooping began a year ago, Response Tree would claim like everyone else with a spammer's plowshare that targets of the illegal sales calls had all agreed to their own abuse. This argument as usual is not working for the FTC or DoJ, because consent by entrapment is not consent at all. The FTC wants defendants banned from making or assisting canned audio sales calls, and also the collection and trade of sales leads. They'd also like a seven million dollar cherry on top.

The FTC complaint discussed the "PatriotRefi" site as an exemplar, promising free quotes on mortgage lending and teasing the user with a friendly stock photo of nuclear family models, whose wardrobe shares the soothing color palette of their couch. The site's design insisted that users pass a "Tell Us About Yourself" input field gate, demanding name, address, phone, email, and birthdate. The large action button marked "GET YOUR FAST FREE QUOTE" failed until the user filled all fields. No one mentions if FTC staff tried any decoy data. (hrmm, let's try First Name: Herman / Last Name: Munster / Street: 1313 Mockingbird Lane ....)

The ultra-teensy text below that big button read in part, underlines as found designating hyperlinks:
    By clicking Submit, I clarify that I am a US resident over 18, and I agree to the Privacy Policy and Terms & Conditions. I agree to receive emails from Patriot Refi and their marketing partners. I agree to be contacted by [sic] and their marketing partners by telephone, which may include artificial or pre-recorded calls and/or SMS text ....

FTC parsing of this pit trap revealed both the farce and the quick lash-up of Response Tree's compliance theater. They note first that the fat button above never said "submit". The upfront text might create the impression that only banker types will get your sensitive data; you'd need to hit the "Privacy Policy" hyperlink and sift through a mound of yet more tiny print to get a mushy clue that your data would be scattered more broadly. To see where they land, select "marketing partners" for a gray-on-white list of 300-plus company names, again rendered in micro-text, which became a pixelated mess in the FTC copy. If you're worried about 'gotchas' in the "Terms & Conditions", you can't read them anyway since there's no link.

My favorite part is where I figure someone forgot to insert the "Patriot Refi" name a second time, suggesting a template was recycled for the other fifty-ish baiting websites. The user-hostile web design is about on-model for this kind of enterprise, but the execution is more sloppy than others we've seen in Federal crosshairs. Telemarketing: A great career move for self-drooling grade school flunkies!

Customers of Response Tree were equally subject to bottom-dealing. Said the FTC ...
    In numerous instances, Defendants sold leads that they misrepresented as having been obtained through their consent farm websites. Defendants took consumer data they had obtained through other sources and falsified metadata to make it look like the consumer data was obtained through their websites.

Sometimes the lead sales were just vaporware, "as Defendants did not even create the websites AgedPeopleMeet.com and ClickToWinAChance.com until after such leads were sold to clients". Why, the chutzpah! Lead pricing ranged from over a hundo apiece to fractions of a penny; the fresh "real-time" leads naturally commanded a premium. Defendants daily averaged 10,000 hot ones, offering five times that on their best days. But price and value are never to be confused, not even when you expect honor among thieves.

The fallout is frankly depressing. Study of a years-long sample of sales calls springing from PatriotRefi leads revealed that about two-thirds landed on DNC registered phone numbers, and nearly all were autodialed and/or canned, lighting up TCPA violations. It's like running a laundromat with dirty water and no soap, then neatly folding over the collar rings and underwear skid marks. But a truly "clean" and legally sound lead list is never possible with these catch-all traps, as the FTC explains:

    Given the long lists of entities presented as marketing partners on their websites, Defendants purport they obtained consent on behalf of numerous and various entities, not a specific seller or party.

Consent is about trust, an exchange within limits visible to all parties. You can't get there with "Insert Name Here" under rules you can't read. How many more Federal agency lawsuits do we need before these dropout types get this through their knotted heads?

. . . . . . . . . .

California-based Lead Generator Agrees to Settlement Banning It from Making or Assisting Others in Making Telemarketing Calls, Including Robocalls - FTC press release, 02 Jan 2024
Response Tree, LLC case landing page