Lead generator to pay $1.5M FTC penalty

The Federal Trade Commission has reported that a lead generation company that collected sensitive information from millions of consumers under the guise of connecting them with lenders will pay $1.5 million in civil penalties and face restrictions on their operations as a result of a Federal Trade Commission lawsuit.

The Commission's complaint alleges that since at least 2012, ITMedia Solutions LLC, a number of affiliate companies, and their owners and officers have operated hundreds of websites that were designed to entice consumers into sharing their most sensitive financial information—including their Social Security numbers and bank account information. The defendants sold that information to marketing companies and others without regard for how the information would be used, according to the complaint.

The suit alleges that the defendants -- who have used cashadvance.com, personalloans.com, badcreditloans.com and websites with similar names -- promised consumers that their information would be shared with “... our network of trusted lenders...” or would “... only be shared with qualified lenders.” Some sites promised that loans were available for people with bad credit histories without credit score requirements.

The FTC alleges that 84 percent of the loan applications collected through these websites since January 2016 were not sold to lenders, but instead disseminated to an array of marketers, debt relief and credit repair sellers, and companies that would resell consumers’ information without regard for how the information would be used. According to the complaint, in many instances, ITMedia was not even aware of the purpose for which a company was buying consumers’ data, or at times even the physical location of the company. In addition to misleading consumers and selling their data without permission, the complaint alleges that ITMedia violated the Fair Credit Reporting Act (FCRA) by unlawfully obtaining and reselling the credit scores of consumers who submitted information. The FCRA limits the purposes for which businesses can obtain credit scores and using scores to market leads is not a permissible purpose.

The defendants agreed to settle the FTC charges against them and, in addition to the civil penalty, the proposed settlement order will prohibit the defendants from making misleading statements to consumers, including about how their personal information will be used. The order will also prohibit the defendants from selling consumers’ personal information outside of a limited set of circumstances, and the order requires them to screen the recipients of that information.

• FTC Case Summary and links