Santa Monica firm pays $1.5 million for illegally obtaining financial data from millions of consumers – Daily News
A Santa Monica company that allegedly tricked millions of consumers into disclosing confidential information under the pretense of associating them with lenders will pay $1.5 million in fines imposed by the Federal Trade Commission.
ITMedia Solutions LLC, which specializes in lead generation, will also face restrictions on the sale and use of consumer data as a result of an FTC lawsuit filed last week.
ITMedia and Nevada and Utah affiliated officials named as defendants in the lawsuit include Michael Ambrose, Daniel Negari, Jason Ramin, Grant Carpenter, Anisha Hancock and Sione Kaufusi.
ITMedia officials did not respond to phone calls and emails seeking comment.
As of December 2012, ITMedia has operated at least 200 websites on which it publishes advertisements targeting consumers seeking online payday loans, consumers with bad credit, and consumers seeking personal and installment loans up to $35,000 the lawsuit.
Websites used by ITMedia and its affiliates to target consumers include cashadvance.com, personalloans.com, badcreditloans.com and others with similar names. The websites say they find loans for consumers who fill out an online form by providing social security and bank account numbers, which the company has labeled as a loan application or application.
To persuade consumers to fill out applications, ITMedia’s websites promise to share confidential information with its network of trusted credit partners and financial providers for loan purposes only.
In reality, according to the lawsuit, ITMedia and the other defendants were selling consumer information to marketing companies and others, regardless of how the information would be used.
“ITMedia tricked millions of people into divulging sensitive financial information and then sold it to companies that did not make loans,” Samuel Levine, director of the FTC’s Consumer Protection Bureau, said in a statement. “The company’s extraction and misuse of this data violated the law on several counts.”
As of January 2016, about 84% of loan applications collected through ITMedia’s websites were not sold to lenders, but instead passed to marketing, debt relief and loan repair companies that would resell consumer information, the lawsuit says.
“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,” the FTC said.
ITMedia sold consumer information to a group of companies who were sued by the FTC last year for marketing payday loan products that overcharged consumers millions of dollars.
The complaint also alleges that ITMedia violated the Fair Credit Reporting Act by unlawfully obtaining and reselling consumers’ credit, putting them at risk for identity theft and other fraudulent activity.
The defendants have agreed to pay the $1.5 million civil penalty to settle the FTC charges against them.
A proposed settlement order prohibits defendants from misleading consumers about how personal information is being used.
They are also restricted from selling consumer personal information outside of a limited number of circumstances and are required to verify the recipients of that information.