Mobile marketing firm settles class-action over text messaging spam

Mobile-phone users who received unwanted text messages may get up to $150 following what appears to be an unprecedented settlement.
Chicago law firm Blim & Edelson declared victory after a federal court approved the settlement between Distributive Networks L.L.C. and members of the class-action lawsuit. While settlements have been reached between wireless carriers and companies accused of mobile spam, the news marks the first time subscribers will receive the cash instead of network operators, according to attorney Jay Edelson.
“There are a handful of these class-action suits (pending), but this is the first that has actually settled,” Edelson said. “Our firm has about five of these suits nationwide, and there’s one other we’re aware of that is also ongoing.”
Members of the class-action lawsuit say they received unwelcome texts touting Distributive Networks Web sites and wireless subscription services such as Astromobo, Daily Pop Gossip, Mad Love Tips and Ringstar Mobile. As many as 1,000 users may be eligible for the settlement money.
Executives from Distributive Networks, a Washington-based mobile marketing firm, were not immediately available for comment. The company did not admit to any wrongdoing under terms of the settlement.
Despite occasional warnings from developers of anti-spam software-Wireless Services Corp. two years ago issued a laughable report claiming nearly half of all U.S. text messages were spam, for instance-unwelcome text come-ons have yet to become a major headache for most U.S. consumers. While the mobile content business has suffered its share of black eyes, thanks largely to consumer backlash against aggregators such as Jamba and Blinko, a mere 14 percent of U.S. subscribers report receiving an SMS ad on their phones, according to recent data from M:Metrics. And the overwhelming majority of unwelcome messages are sent by carriers themselves, the market research firm found.
As advertisers increasingly look to place their messages on mobile phones, though, complaints of mobile spam are likely to increase. Edelson said he’s hopeful the settlement sends a message to other mobile marketing firms hoping to send text ads to wireless phones. And the firm plans to build a Web site where consumers who think they’ve received unwanted messages from Distributive Networks.
“We think that the settlement is going to prove a strong deterrent for other companies looking to get into the text message advertising game,” Edelson said. “We think, obviously, that this is a pretty good signal to defendants” in other pending cases.