Spokeo to pay $800,000 to settle FTC lawsuit
Data broker Spokeo Inc. will pay $800,000 to settle a Federal Trade Commission lawsuit that alleged the Pasadena company illegally sold personal information.
Spokeo collects and aggregates data such as home addresses, email addresses and telephone numbers from public records and social media sites. It compiles that information into profiles, which it sells to subscribers.
The FTC said the company violated the Fair Credit Reporting Act, which, among other things, requires providers of consumer reports to ensure the information is accurate and inform job seekers if employers decide not to hire them based on the information.
The FTC’s statement on the settlement said the company sold data to businesses “in the human resources, background screening, and recruiting industries” in violation of the law.
“This is the first Commission case to address the sale of Internet and social media data in the employment screening context,” said the FTC in the statement.
The FTC also accused Spokeo of posting deceptive endorsements of the service, “portraying the endorsements as independent when in reality they were created by Spokeo’s own employees.”
Spokeo founder and President Harrison Tang wrote on the company’s website Tuesday that the company has made changes to its website and business to make sure it is not violating any laws “and to ensure an honest and transparent service that will continue to be easy for our customers to use.”
“As we continue to provide new innovations within the people search industry, we are committed to making clarity and transparency top priorities for our customers,” Tang wrote.
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