Information Brokers Reach Settlement With FTC
Information brokers who allegedly used deceptive methods to obtain private financial information about consumers and then sold that data have reached an agreement with the Federal Trade Commission.
In 1999, the FTC charged that James and Regana Rapp, who ran a business called Touch Tone Information Inc., lied to financial institutions about their identity. Using a practice known as “pretexting,” they would call a bank and say, for example, that they forgotten their checkbook and needed information about their account, according to an FTC statement. They then sold the information over the Internet, in violation of the FTC Act, said agency.
According to the FTC, the settlement prohibits the brokers’ firm Touch Tone, from pretexting, except where permitted under the law, and from selling that information. They must also post a privacy policy on their Web site. A settlement of $200,000, which represents the amount of the defendants’ unlawful gains, has been suspended based on defendants’ financial disclosures.
