Lead Generator to Pay $1.5 Million FTC Penalty for Alleged FCRA Violations – ESR NEWS

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Written By ESR News Blog Editor Thomas Ahearn
A lead generation company that allegedly violated the federal Fair Credit Reporting Act (FCRA) by unlawfully obtaining and reselling credit scores of consumers will pay $1.5 million in civil penalties and face restrictions on their operations as a result of a Federal Trade Commission (FTC) lawsuit, according to an FTC press release.
The FTC’s complaint also alleged that the lead generation company, many affiliate companies, and owners and officers operated hundreds of websites since at least 2012 that were designed to entice consumers into sharing sensitive financial information that included their Social Security numbers (SSNs) and bank account information.
The defendants allegedly collected sensitive information from consumers under the guise of connecting them with lenders and sold that data to marketing companies without regard for how it would be used. The FCRA limits the purposes for which businesses can obtain credit scores and market leads are not a permissible purpose.
The FTC alleged that 84 percent of the loan applications collected through these websites since January 2016 were not sold to lenders but instead disseminated to an array of marketers, debt relief and credit repair sellers, and companies that would resell consumer information without regard for how the information would be used.
The defendants “tricked millions of people into giving up sensitive financial information and then sold it to companies that were not making loans,” Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated in the press release. “The company’s extraction and misuse of this data broke the law in several ways.”
In addition to the civil penalty of $1.5 million, the proposed settlement order will prohibit the defendants from making misleading statements to consumers about how their personal information will be used and also prohibit them from selling the personal information of consumers outside of a limited set of circumstances.
The FTC works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. Report fraud, scams, or bad business practices at Get consumer advice at Also, follow the FTC on social media, subscribe to press releases, and read the FTC’s blogs.

Employment Screening Resources® (ESR) – a service offering of ClearStar, a leading provider of Human Capital Integrity℠ technology-based services, specializing in background, credit, and medical screening – offers background screening solutions that comply with the FCRA. To learn more, contact ESR today.

NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
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