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Lead generator who deceptively solicits loan applications from millions of consumers and indiscriminately shared sensitive information agrees to pay $ 1.5 million FTC penalty

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

The FTC complaint alleges that since at least 2012 ITMedia Solutions LLC, a number of affiliates and their owners and officers have operated hundreds of websites designed to trick consumers into sharing their most sensitive financial information, including their social security numbers and their bank account information. The defendants sold this information to marketing companies and others regardless of how the information would be used, according to the complaint.

“ITMedia tricked millions of people into divulging sensitive financial information and then sold it to companies that weren’t lending,” said Samuel Levine, director of the FTC’s Office of Consumer Protection. “The company’s extraction and misuse of this data has violated the law in several ways. “

The lawsuit 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 have promised that loans are available for people with bad credit history without credit score requirements.

In its complaint, the FTC alleges that 84% of loan applications collected through these websites since January 2016 have not been sold to lenders, but rather disseminated to a range of merchants, debt relief vendors and retailers. credit repair, and businesses that would sell back to consumers. regardless of how that information would be used. According to the complaint, in many cases ITMedia was not even aware of the purpose for which a company was purchasing consumer data, or sometimes even the physical location of the company.

ITMedia sold the consumer information to a group of companies that were sued by the FTC last year for marketing payday loan products that overcharged consumers by tens of millions of dollars.

The complaint notes that the harm to consumers caused by ITMedia’s “indiscriminate” sale of consumer data was substantial, putting them at risk of identity theft and scams.

In addition to misleading consumers and selling their data without authorization, the complaint alleges that ITMedia violated the Fair Credit Reporting Act (FCRA) by illegally obtaining and reselling the credit scores of consumers who submitted information. . The FCRA limits the purposes for which businesses can obtain credit scores, and the use of scores to market leads is not an authorized purpose.

The defendants have agreed to settle the charges against them by the FTC and, in addition to the civil penalty, the proposed settlement order will prohibit defendants from making misleading representations to consumers, including about how their personal information will be. used. The order will also prohibit 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.

The complaint alleges that ITMedia Solutions LLC and a number of related companies, as well as Michael Ambrose, Daniel Negari, Jason Ramin, Grant Carpenter, Anisha Hancock, and Sione Kaufusi violated FTC and FCRA law.

The Commission’s vote allowing staff to file the complaint and stipulated the final order was 4-0. Commissioner Christine S. Wilson made a concurring statement. FTC filed complaint and final order / injunction in the United States District Court for the Central District of California.

REMARK: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The final stipulated orders have the force of law when approved and signed by the judge of the district court.