A California-based lead generation company recently settled with the FTC for $1.5 million over alleged privacy violations. The FTC argued that the company deceptively acquired consumer personal information and improperly shared this information with various entities under the guise of connecting consumers with lenders. Information in question included Social Security numbers and bank account information.
As covered in our sister blog, according to the complaint, the company operates hundreds of websites encouraging consumers to complete online loan applications. It represented that it would send those applications only to a “trusted network of lenders.” The company made many representations about the limits of its sharing. Despite these promises, the FTC alleged, the company sold consumers’ information to non-lender marketers, debit card sellers, debt negotiation and credit repair services. This sharing constituted deception under Section 5 of the FTC Act.
The company also failed to impose use restrictions on the information sold and, in many instances, was not aware of the purposes for which companies were purchasing the consumers’ information. These acts constituted unfair practices under Section 5. The FTC’s complaint also alleged that the company unlawfully obtained and resold the credit scores of consumers in violation of the Fair Credit Reporting Act.
Putting it into Practice: This case highlights the FTC’s ongoing focus on ensuring companies are following their stated practices, especially when it involves sharing sensitive information with third parties.
About this Author
Liisa Thomas, a partner based in the firm’s Chicago and London offices, is Co-Chair of the Privacy and Cybersecurity Practice. Her clients rely on her ability to create clarity in a sea of confusing legal requirements and describe her as “extremely responsive, while providing thoughtful legal analysis combined with real world practical advice.” Liisa is the author of the definitive treatise on data breach, Thomas on Data Breach: A Practical Guide to Handling Worldwide Data Breach Notification, which has been described as “a no-nonsense roadmap for in-house and…
A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm’s Washington, D.C. office.
A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.
With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving…
Snehal Desai is an associate in the Intellectual Property Practice Group in the firm’s San Francisco office. She is a member of the Privacy and Cybersecurity Team, the Advertising Team and the Technology Transactions Team.
Areas of Practice
Advertising: Snehal advises clients in conducting advertising campaigns, contests and sweepstakes, and brand marketing campaigns.
Technology and Commercial Transactions: Snehal drafts and negotiates…
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