A data company that compiled and sold profiles on millions of people is set to settle a sizable suit with the Federal Trade Commission.
Spokeo, Inc., will pay $800,000 to the FTC to settle charges that it sold information on consumers to companies specializing in human resources, background screening and recruiting, but did not adhere to protocol set forth by the Fair Credit Reporting Act, according to a report from the
government watchdog. In particular, the company was said to have failed in ensuring that its information would only be used for legally-accepted purposes, or that it was accurate.
Further, the company allegedly failed to tell users about their obligations under the Fair Credit Reporting Act, including that they had to tell consumers if the user took adverse action against them as a result of the information in the reports Spokeo compiled, the report said. As a result of the settlement, the company is also barred from further violating the FCRA.
Eduard Goodman, chief privacy officer for
Identity Theft 911, writes about the privacy challenges companies such as Spokeo may pose for consumers.
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