FTC phone and financial records cases

The Federal Trade Commission announced a settlement of its complaint against Integrity Security & Investigation Services for “unfair or deceptive acts or practices in or affecting commerce” by obtaining telephone customer data and credit card purchase records. Four other similar cases against other data brokers are still pending. The FTC has little enforcement authority in this area and the cost for each investigation must be very high for the immediate results.

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 or financial records. Under the terms of the settlement, the defendants will give up $2,700 in ill-gotten gains – the entire amount they earned from selling the phone records and credit card transaction reports.

The order also requires the defendant to “appear and provide truthful testimony in any trial, deposition, or other proceeding related to or associated with the transactions or the occurrences that are the subject of the Complaint, without the service of a subpoena…”

The FTC action and states’ attorney generals lawsuits shine an ever brighter spotlight on data gathering techniques, which has prompted congressional hearings and more specific state laws banning pretexting to obtain telephone records. No doubt, other industries and research methods will be targeted as a “consumer protection” concern without consideration for other overriding interests.


One thought on “FTC phone and financial records cases

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