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FTC Nails List Broker for Aiding in Telemarketing Fraud

List broker allegedly helped fraudsters sell 'advance-fee' credit cards by giving them unencrypted consumer data

The Federal Trade Commission last week reached a settlement with a direct marketing list company that is alleged to have aided telemarketers with a fraud scheme.

The FTC complaint alleged the defendants sold “full data leads” to these telemarketers that included consumers’ bank account and routing information, credit card numbers, credit card security codes, and credit card expiration dates, without first obtaining authorization from consumers to do so, all the while knowing that the data would be used in schemes designed to mislead and defraud consumers.

The settlement orders the list firm and its owner, Glenn Patten, from violating the Telemarketing Sales Rules (TSR). The proposed order also contains a suspended $120,000 judgment against the defendants. The full judgment will be imposed if they are found to have misrepresented their financial condition.

The Commission’s complaint charges Patten with assisting and facilitating telemarketers who falsely represented to consumers that after paying an advance fee consumers were guaranteed to receive a credit card, while knowing, or consciously avoiding knowing, that the telemarketers were engaged in conduct that was in violation of the TSR.

In addition, the complaint charges Patten with assisting and facilitating the actions of telemarketers by providing them with unencrypted consumer account information in the full data leads he sold them. The TSR specifically prohibits providing telemarketers with such unencrypted information.

— Tim Wilson, Site Editor, Dark Reading