Security & Fraud

FTC/Data Broker Settle Over Selling Scammers’ Bank Account Data


Defendants accused of intentionally brokering hundreds of thousands of consumers’ sensitive data have settled their case brought by the Federal Trade Commission.

According to a statement released by the FTC on Thursday (Feb. 18), the group of defendants, which include John Ayers, LeapLab and Leads Company, have been ordered by a federal court to stop selling or transferring sensitive personal data from consumers to third parties.

“LeapLab purchased sensitive information, including Social Security and bank account numbers, from payday loan websites and then sold that information to entities it knew had no legitimate need for it,” explained Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “That allowed scammers to steal millions of dollars from people’s accounts.”

In accordance with the settlement, the defendants are also ordered to refrain from misleading consumers about loan terms and availability, as well as to destroy all of the personal consumer data in their possession within the next 30 days.

“The orders include a $5.7 million monetary judgment, which is suspended based on the defendants’ sworn inability to pay. In addition to the settlement orders, the court entered an unsuspended $4.1 million default judgment with similar prohibitions against SiteSearch, the remaining defendant in the case,” the statement continues.

The FTC’s initial complaint states that the defendants allegedly collected data from hundreds of thousands of loan applications, which contained valuable information, such as a consumer’s name, address, Social Security number and bank account number, and, ultimately, sold 95 percent of these applications to nonlenders for approximately $0.50 each.

Earlier this week, the FTC announced it would begin sending checks to the victims of yet another payday loan-related scam, which swindled money from consumers by promising they could get payday loans but instead debited unauthorized funds through their bank accounts in $30 amounts.

As has been reported, in July 2014, a federal court halted payday loans and operations conducted by a number of individuals and entities, including Ideal Advance, Loan Assistance Company, Loan Tree Advances, Your Loan Funding, Sean C. Mulrooney, Odafe Stephen Ogaga, Palm Loan Advances and Pacific Advances.

Back in 2013, the FTC said the Tampa-based firms and people used the Internet to snare consumers who gave up valuable personal data — of course, opening the door to fraudulent activity.


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