Two Firms Charged With Illegally Selling Financial Information To Scammers

The FTC has charged two data broker companies for illegally selling payday applicant’s financial information to scammers, resulting in more than $7 million dollars lost by consumers.

According to court documents, Sequoia One LLC, Gen X Marketing Group LLC, and three of the company’s managers bought payday loan applications and sold them to non-lender third parties, like Ideal Financial Solutions.

Ideal Financial Solutions, who were charged by the FTC in 2013, used the application’s sensitive information like Social Security numbers, credit card and bank account numbers, without consent. They took money out of the consumer’s bank accounts and made charges to their credit cards.

“Companies that collect people’s sensitive information and give it to scammers can expect to hear from the FTC,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.

The FTC said the two firms knew Ideal Financial Solutions was making unauthorized bank account debits and credit card charges. They even said the companies helped Ideal Financial by using misleading tactics, like fine-print disclosures, to avoid suspicion from banks.

All three managers have decided to settle with the FTC, while the lawsuit against the two firms continues.

Data brokers are defined by the FTC as companies that compile information about consumers from their online activities, purchase histories, public records and other sources.  They use this information to sell detailed profiles to third parties for marketing, fraud prevention and other purposes.