If the friend of a friend is my friend, and the enemy of a friend is my enemy, then is the seller of data to a scammer also a scammer? In a case announced today, the FTC said it might well be.
Here’s the backstory: In 2013, we told you about a case we brought against Ideal Financial Solutions, Inc., a Nevada corporation. That company, says the FTC, bought information that let it raid consumers’ bank and credit card accounts for millions — without the consumers’ OK or even knowledge. At the time, it was clear that many of these consumers had applied for online payday loans. But what wasn’t clear at the time was where Ideal Financial Solutions, Inc. had gotten those bank account and credit card numbers.
Until now. Today, the FTC said that a data broker operation — Sequoia One, LLC, Gen X Marketing Group, LLC, and four principals — collected sensitive information from online payday loan applications, including Social Security numbers, credit card and bank account numbers. Then, says the FTC, they turned around and sold it to companies that included non-lenders like Ideal Financial Solutions, Inc. which the defendants knew were taking money from peoples’ bank accounts and credit cards. And, says the FTC, the defendants actually helped hide Ideal Financial Solution scam.
Three of the defendants — Paul T. McDonnell, Theresa D. Bartholomew, and John E. Bartholomew, Jr. — agreed to settle the FTC charges. The proposed order imposes a monetary judgment, and says they can’t sell or benefit from selling consumer information from now on. The case against the rest of the defendants will be litigated.
So, what’s a person to do? Mainly this: think long and hard before you give out your Social Security number or bank or credit card information. Sometimes, you have to, if you want the service or offer. But stop and think: what do you know about the company, their website, or how they’ll protect your information? And if you think something has gone amiss with information you’ve already shared, tell the FTC.
[Note: Edited August 26, 2016, to specify that the Nevada-based company name is Ideal Financial Solutions, Inc.]