Operation Unlawfully Sharing, Selling Consumers’ Sensitive Data Stopped by FTC
Company earned millions by making false promises about loans
The people operating a lead generation firm have agreed to a settlement of charges brought by the Federal Trade Commission (FTC) alleging unlawful sharing and selling of sensitive data.
The company was accused of misleading customers into filling out applications for loans and then selling the applications—and the customers' data on them—to almost anyone willing to pay for the leads.
According to the FTC, Blue Global Media and its CEO, Christopher Kay, operated numerous websites that would entice consumers to fill out loan applications. The defendants would then sell those applications as "leads" to several entities with no thought about how the information on the applications would be used or whether it would stay secure.
The websites operated under domains such as 100dayloans.com, 1houradvance.com, cashmojo.com, and clickloans.net. They offered different services to people looking for different kinds of loans, including auto and payday loans. The firm claimed that it would search through a network of 100 or more lenders, then connect the applicant to the lender offering the best terms.
According to the FTC, the defendants actually sold few applications to lenders. They also didn't match applications based on either loan rates or terms, and they sold the applications to the first entity willing to pay.
In addition, the firm promised to protect and secure the sensitive information included on the applications, such as Social Security numbers and bank account numbers, by providing it only to "trusted lending partners." However, the FTC alleges that all the application information was provided to any potential buyer unconditionally and with little thought about how it would be used. The consumers had no knowledge of this and did not consent, says the FTC, and the company neither investigated nor took preventative action when consumers complained.
The settlement includes a judgment of more than $104 million, which is suspended based on the defendants' inability to pay. The defendants are also prohibited from misrepresenting their ability to help provide consumers with loans on favorable rates and terms, to protect and secure consumers' personal information, and the kinds of businesses with which they share such information. Finally, they also must investigate and verify the identities of those businesses and obtain the express and informed consent of the consumers in question to share their information.