FTC Investigation: Mobile Money Code
The Mobile Money Code scam was highlighted about in multiple press releases from Federal Trade Commission, as the FTC filed a case against all those involved in the scam in the U.S. District Court for the Middle District of Florida. Initial investigations highlighted that the alleged marketers, who were using a "get-rich-quick-scheme," were deceiving potential customers and were violating multiple advertising and spamming prohibition laws.
The Mobile Money Code Scam
- On December 28, 2017, the FTC released an official press release describing the case and the allegations against the individuals and the companies involved in the Mobile Money Code fraud.
- "The Commission alleged that Ronnie Montano, Hyong Su Kim (also known as Jimmy Kim), Martin Schranz and their related companies bilked consumers out of millions of dollars by falsely promising they could earn hundreds to thousands of dollars a day using the defendants' Mobile Money Code products; however, in reality, the Mobile Money Code products were generic software applications that could help the user make mobile-friendly websites."
- In addition to the allegations mentioned above, the FTC also accused the defendants of violating the FTC Act's prohibition against deceptive practices and the CAN-SPAM Act. These acts have mandated that "commercial e-mails must contain an accurate header and relevant and specific subject lines, they must identify itself as an ad and include a valid physical address, and offer recipients a way to opt-out of future messages."
Allegations Against the Companies
- Specific allegations include spam mails by affiliate marketers, high pressure up selling, false promises about the earnings, deceptive claims, fake and paid testimonials about the products. Moreover, the defendants also dishonored their "60-day hassle-free money-back guarantee" by making it extremely difficult and next to impossible for the customers to take any refund from the alleged money code websites.
- Additionally, the defendants' websites also have allegedly blocked consumers who wanted to opt-out of the website by using multiple pops up messages. "Consumers who agreed to make an initial purchase were asked to make additional purchases through upsells and add-ons." The companies were charged with commercial impropriety.
- Consumers, companies, and affiliate marketers have been warned about false promises and deceptive claims about products. A blog article on the FTC website offered insights on how consumers can avoid such frauds, which primarily included tips like "do not trust easy gain offers," and "less detailed and vague product descriptions are suspicious."
- Companies are required to keep a check on the kind of advertising their affiliate marketers are doing on their behalf, and affiliate marketers are advised to be very careful about their advertisement claims. Regarding the Can-Spam act violations, both the company and the affiliate marketer will be held responsible.
- Final settlements from the case included a $7 million judgment; however, this judgment will be suspended upon payment of a total of $698,500. The final amount will be used for refunding consumers who were caught up in the defendants' scheme.
- "The defendants also are prohibited from marketing or selling money-making software, from making misrepresentations in the promotion, marketing, or sale of any good or service, from violating the CAN-SPAM Act, and from using any consumer information they collected."
- The refunds have arisen from a settlement with the operators of the Mobile Money Code scheme; other names used by the operators included eMobile Code, Auto Mobile Code, Easy Cash Code, Full Money System, and Secret Money System.
- There were a total of three press releases from FTC about the case and two blog posts about the same. The first-ever press release was made on December 28, 2017; the second one was released in the month of June 2018, and the final one about the refunds was released on March 11, 2019.
- "The Commission vote approving the stipulated final orders for the settlement was by 5-0, and proposed orders were filed in the U.S. District Court for the Middle District of Florida, Orlando Division."
- No media coverage about the case was made by any of the top tier media houses; however, some local media publications, including Orlando Sentinel, have covered the fraud case. Other than the FTC itself, only a few law firms have published information about this case.
- The news article by Orlando Sentinel was a mere copy of the official press release and included the same level of details as the official press release by FTC.
Social Media Reaction
- The accused companies do not have any verified social media accounts; for instance, GSD Master AG does not have any social media accounts, and no press releases or mentions were found about the case.
- Verified social media accounts of the defendants were unavailable mainly due to the fact that there are multiple companies with the same names, and the details about these companies, which were found in the case files of the Mobile Money Codes case, do not match any of the available social media profiles.
- FTC also has posted on Facebook about the case, one post was found on the official Facebook account of the Federal Trade Commission, and the post was about the refunds that were made in the case by the FTC.
To provide a robust overview of the FTC investigation on the Mobile Money Code case, we searched through a variety of sources, which included top tier news publications, FTC database, court briefs from the Federal Court of Middle District of Florida, company databases and social media resources. However, the investigated companies, including JK Marketing LLC and Montano Enterprises LLC, do not have an official website available in the public domain, and so press releases from these companies about the case could not be located. While GSD Master AG, which is also one of the investigated companies, has an official website, it still does not offer any official social media accounts or any press releases or any relevant mentions about the case in particular.
Since the official websites were unavailable, we opted to search for media statements from the owners of these companies, which include Ronnie Montano, Jimmy Kim, and Martin Schranz. For this, we searched through both the top tier publications (like Reuters, WSJ, CNN, Time, The New York Times) and local publications in Orlando, Nevada, and New York (locations where the company is based). However, no official statements were found from any of the owners about the company or the case.
To obtain additional information about these companies such as the executives, who could have possibly provided an official statement about the company's involvement in the case, we searched through company databases such as Hoover D&B, Pitchbook, Manta, Zoominfo; however, none of these had any verified profiles of these companies.
We also searched through Instagram and Facebook to find any company profiles that match the profile details of the companies alleged in the case. While we found multiple companies with the same names, none of the profiles matched any of the details provided in the court briefs about the alleged companies.