FTC Files Suit Against ‘Pretexters’
The Federal Trade Commission has filed suit in three U.S. District courts to stop information brokers from fraudulently obtaining consumers’ confidential financial information.
Obtaining such private financial data, a practice known as “pretexting,” violates federal law. The FTC asked the courts to halt the illegal practices permanently, freeze the defendants’ assets pending trial and order them “to give up their ill-gotten gains,” according to an FTC statement.
Defendants named in FTC documents are Victor L. Guzzetta, d/b/a Smart Data Systems; Information Search Inc. and David Kacala; and Paula L. Garrett, d/b/a Discreet Data Systems.
In documents filed with the courts, the FTC charged that the defendants maintained Web sites on which they advertised that they could obtain non-public, confidential financial information for fees ranging from $100 to $600. That confidential information included such things as checking and savings accounts numbers and balances; stock, bond and mutual fund accounts and safe deposit box locations.
In sting operations arranged by the FTC in cooperation with local banks, investigators set up dummy bank accounts in the names of cooperating witnesses and then called defendants posing as purchasers of the information.
The FTC charges that the defendants used false pretenses to steal consumers’ private financial information and sell it. The practices violate the FTC Act and the Gramm-Leach-Bliley Act, according to the commission. The FTC alleges that the sale of financial information by pretexters could injure consumers because their confidential financial information “could be disclosed to individuals who might use it to deplete a bank account or liquidate a stock portfolio, or steal an identity,” said an FTC statement.
