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The FTC today announced that Spokeo, Inc. has agreed to pay $800,000 to settle charges that it sold detailed profiles on millions of consumers without taking the steps to protect those consumers that are required under the Fair Credit Reporting Act (FCRA).
"Spokeo creates profiles of millions of people by aggregating information from public sources such as phone listings, social networks, marketing surveys, real estate listings and other websites," writes The Hill's Brendan Sasso. "The profiles often include names, addresses, ages and email addresses. The site even collects information about people's finances, hobbies and pictures of them and their homes."
"The Commission alleges that from 2008 until 2010, Spokeo marketed the profiles on a subscription basis to human resources professionals, job recruiters, and others as an employment screening tool," writes The Next Web's Robin Wauters.
"In the first FTC case addressing the sale of Internet and social media data in the employment screening area, the agency alleged that Spokeo operated as a consumer reporting agency but failed to ensure that the information it sold would be used only for legal purposes, the agency said," writes PCWorld's Grant Gross. "Spokeo also violated the FCRA by failing to ensure that the information it sold was accurate and by failing to tell users of its consumer reports about the company's obligations under the credit law, the FTC alleged."
In response, Spokeo founder Harrison Tang stated in a blog post today, "It has never been our intention to act as a consumer reporting agency. We have made changes to our site and our internal business practices in order to ensure we don’t infringe upon the FCRA’s important consumer protections, and to ensure an honest and transparent service that will continue to be easy for our customers to use."
"The FTC also alleged that Spokeo published bogus customer endorsements on news and technology websites and blogs, portraying the endorsements as independent, when in fact Spokeo employees created them," writes Wired's Kim Zetter. "Spokeo, as is common with FTC complaints, agreed to pay the fine without admitting guilt or liability."