Settlement Bars Pretexting and Selling Consumers’ Confidential Phone Records
An outfit that obtained consumers’ confidential phone records and sold them to third parties without the consumers’ consent has agreed to settle Federal Trade Commission charges that the practice violated federal law. The settlement bars the defendant from obtaining, causing others to obtain, marketing, or selling customer phone records except where allowed by law, regulation, or court order. The defendant also will give up his ill-gotten gains.
In May 2006, the FTC filed federal court complaints charging five Web-based operations that obtained and sold consumers’ confidential telephone records to third parties with violating federal law. The agency asked the courts to order a permanent halt to the sale of the phone records and has asked the courts to order the operators to give up the money they made through their illegal scheme. The settlement announced today with Information Search, Inc., and its principal, David J. Kacala, ends the litigation against them. One other operation also has settled the FTC charges. Three other cases remain in litigation.
The settlement bars the defendants from obtaining or selling consumers’ phone records or personal information unless authorized by law or court order. It bars them from pretexting – obtaining records using false pretenses – or hiring others who pretext to obtain phone records. The settlement imposes a judgment of $40,075 – the total amount the defendants made by unlawfully obtaining and selling the phone records. All but $3,000 of that amount is suspended, based on financial declarations made by the defendants. Should the court find that the declarations were inaccurate, the total $40,075 will become due. The settlement also contains standard record keeping provisions to allow the FTC to monitor compliance with its order.
The Commission vote to accept the settlement was 5-0. It was filed in U.S. District Court for the District of Maryland, Northern Division and entered by the court February 22nd.
NOTE: A stipulated final order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated judgments have the force of law when signed by the judge.
Copies of the complaint and consent agreement are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad.
Claudia Bourne Farrell,
Office of Public Affairs
Bureau of Consumer Protection
(Civil Action No. AMD 06CV1099)
(FTC File No. X06 0030)