Antitrust Law Daily Wrap Up, PRIVACY NEWS: Debt brokers agree to settle FTC charges of exposing consumer info online, (Apr 14, 2015)
Organizations Mentioned:Bayview Solutions, LLC | Cornerstone and Co., LLC
By Michael Menzhuber, J.D., LL.M.
Two debt broker companies and their owners, who were charged by the FTC with exposing highly sensitive information about tens of thousands of consumers while trying to sell portfolios of consumer debt on a public website, have agreed to a settlement. The settlement agreements require the Bayview Solutions, LLC and Cornerstone and Co., LLC to abide by strict new requirements to protect consumers’ sensitive information.
In separate cases filed last year against Cornerstone and Company, LLC and its owner, Brandon Lambert (FTC v. Cornerstone and Co., LLC, Case No. 1:14-cv-01479), and Bayview Solutions, LLC and its owner, Aron Tomko (FTC v. Bayview Solutions, LLC, Case No. 1:14-cv-01830), the FTC alleged that they posted unencrypted documents online containing consumers’ names, addresses, credit card numbers, bank account numbers, and amounts the consumers allegedly owed. The sensitive data was posted on a website geared for debt buyers, sellers, and other members of the debt collection industry, but was accessible to anyone with an internet connection. As a result, those consumers were exposed to risks ranging from identity theft to “phantom debt” collection.
A federal court, in response to the FTC’s lawsuits, ordered that the website hosting the sensitive information be taken down immediately. The defendants were also ordered to notify the affected consumers that their information had been exposed and of steps they could take to protect themselves.
The settlement agreements require that the defendants establish and maintain security programs that will protect consumers’ sensitive personal information. In addition, these security programs are required to be initially evaluated by a certified third party and every two years thereafter.
Companies: Bayview Solutions, LLC; Cornerstone and Co., LLC
News: Privacy ConsumerProtection FederalTradeCommissionNews