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'Free' gift card promoters to pay $2.5 million in fraud case

'Free' gift card promoters to pay $2.5 million in fraud case
The Federal Trade Commission accused six people and their companies of defrauding consumers by offering "free" gift cards that never arrived. (Larry W. Smith / EPA)

The owners of six companies, including three from Orange County, have agreed to pay $2.5 million to settle a Federal Trade Commission lawsuit that accused them of sending out millions of text messages offering free gift cards they never delivered.

The FTC said six individuals and their companies offered "free $1,000 gift cards" as a ruse to acquire victims' personal information, which they later sold, and to get them to pay for unwanted services and subscriptions.

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In addition to paying a $2.5-million penalty, the defendants agreed to never again participate in fraudulent marketing campaigns. The Orange County companies were All Square Marketing of Mission Viejo, Threadpoint of Laguna Hills and PC Global Investments of Aliso Viejo.

The companies and their affiliates sent out millions of spam text messages to promote the scam, the FTC said.

"This case halts a nationwide operation that took in millions of dollars by promising consumers free gift cards that it never delivered," said Jessica Rich, director of the FTC's bureau of consumer protection. "We're pleased to stop these unwanted messages and protect consumers' personal information."

The settlement was approved by a federal judge in Illinois.

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