FTC Seeks Halt to Sale of Consumers Confidential Telephone Records

The Federal Trade Commission has filed federal court complaints charging five Web-based operations that have obtained and sold consumers’ confidential telephone records to third parties with violating federal law. The agency is seeking a permanent halt to the sale of the phone records, and has asked the courts to order the operators to give up the money they made with their illegal operations.

“Trafficking in consumers’ confidential telephone records is outrageous,” said Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection. “It robs consumers of their privacy and exposes them to everything from snoops to stalkers. We intend to put a stop to it.”

In congressional testimony last February, the FTC said it was investigating companies that advertised on the Internet that they would obtain and sell telephone records. The testimony said that FTC staff had surfed the Web to locate companies that offered to sell consumers’ phone records, identified targets, and completed undercover purchases of the phone records. FTC staff followed up with warning letters to operators of 29 Web sites that continued to advertise the sale of phone records to the public.

The Telecommunications Act of 1996 states that customers’ phone records are their private property and can only be disclosed to the customer or with the approval of the customer. According to the FTC complaints in these cases, the defendants advertised on their Web sites that they could obtain the confidential phone records of any individual, including lists of outgoing and incoming calls, and make that information available to their clients for a fee. “The account holders have not authorized the defendants to obtain access to or sell their confidential customer phone records. Instead, to obtain such information, defendants have used, or caused others to use, false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as a customer of a telecommunications carrier, to induce officers, employees, or agents of telecommunications carriers to disclose confidential customer phone records,” the FTC complaints state. The defendants then sold the records to third parties. According to a Commission complaint, one of the defendants, Integrity Security & Investigations Services, Inc., based in Yorktown, Virginia, also advertised, obtained and sold consumers’ financial records, including credit card information.

The agency charged that the practices violate the FTC Act and has asked the courts to permanently bar the illegal practices and order the defendants to give up their ill-gotten gains.

The FTC brought these cases with the invaluable assistance of the Federal Communications Commission. The FTC also acknowledges the assistance of Cingular Wireless LLC, Sprint Nextel Corp., and Verizon.

The defendants in these cases are: 77 Investigations, Inc., and Reginald Kimbro, based in Upland, California, and using mailing addresses in Jacksonville, Florida, Broomfield, Colorado, and Nashville, Tennessee; AccuSearch, Inc., doing business as Abika.com, and Jay Patel, based in Cheyenne, Wyoming; CEO Group, Inc., doing business as Check Em Out, and Scott Joseph, based in Fort Lauderdale, Florida; Information Search, Inc., and David Kacala, based in Baltimore, Maryland; and Integrity Security & Investigation Services, Inc., Edmund L. Edmister, Tracey Edmister, and F. Lynn Moseley, based in Yorktown, Virginia, with a mailing address in Laguna Beach, California.

The Commission vote to file the complaints was 5-0.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint and settlements are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.