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Data broker settles Fair Credit Reporting Act violations for $800,000
Posted: June 13, 2012
A data broker has agreed to pay $800,000 to settle charges that it marketed profiles to human resources, background screening and recruiting companies without protecting consumers' information, the Federal Trade Commission (FTC) said Tuesday.
In a statement, the FTC said Pasadena, Calif.-based Spokeo Inc. operated as a consumer reporting agency and violated the Fair Credit Reporting Act (FCRA) from 2008 to 2010 by failing to ensure that the information it sold as an employment screening tool was accurate and would be used only for legally permissible purposes.
Spokeo also failed to tell companies using the reports about their obligation under FCRA, including the requirement that they notify consumers if the company took an adverse action based on information contained in the report, according to the FTC.
In addition, the FTC charged Spokeo with deceptively posting independent endorsements of its service on Web sites and blogs when they were actually devised by the firm's own employees.
When asked to comment on the fine, a spokeswoman referred to a blog by Spokeo President and founder Harrison Tang that said the FTC focused on a prior version of its Web site.
Want to know more? Read the full article by Judy Greenwald at Business Insurance