Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Data brokers settle FTC charges over sale of consumer information to scammers, (Feb 19, 2016)
Organizations Mentioned:Bureau of Consumer Protection | Leads Company, LLC | LeapLab, LLC | SiteSearch Corporation | Sitesearch Corp.
By Linda O’Brien, J.D., LL.M.
A group of marketers have settled FTC charges that they knowingly provided scammers with hundreds of thousands of consumers’ sensitive personal information, including Social Security and bank account numbers, the agency announced yesterday (FTC v. SiteSearch Corporation, File No. 142-3192).
In its complaint, the FTC charged that the marketers collected hundreds of thousands of loan applications submitted by financially-strapped consumers to payday loan sites. Each application contained the consumer’s name, address, phone number, employer, Social Security number, and bank account number.
The defendants sold 95 percent of these applications for approximately $0.50 each to non-lenders that did not use the information to assist consumers in obtaining a payday loan or other extension of credit and had no legitimate need for this financial information. At least one of those marketers, Ideal Financial Solutions, used the information to withdraw millions of dollars from consumers’ accounts without their authorization.
The proposed federal court orders prohibit John Ayers, LeapLab, and Leads Company from selling or transferring sensitive personal information about consumers to third parties. The defendants will also be prohibited from misleading consumers about the terms of a loan offer or the likelihood of getting a loan. In addition, the settlements require the defendants to destroy any consumer data in their possession within 30 days.
The orders include a $5.7 million monetary judgment, which is suspended based on the defendants’ sworn inability to pay. In addition to the settlement orders, the court entered an unsuspended $4.1 million default judgment with similar prohibitions against SiteSearch, the remaining defendant in the case.
“LeapLab purchased sensitive information, including Social Security and bank account numbers, from pay-day-loan websites, and then sold that information to entities it knew had no legitimate need for it,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “That allowed scammers to steal millions of dollars from people’s accounts.”
Companies: SiteSearch Corporation; LeapLab, LLC; Leads Company, LLC
News: ConsumerProtection Privacy FederalTradeCommissionNews