Online Data Broker Settles FTC Charges Privacy Pledges Were Deceptive

An online data broker that charged consumers $10 based on the promise that it could “lock their records”so others could not see or buy them, has agreed to settle Federal Trade Commission charges that its claims were deceptive and violated federal law. The settlement requires that the operation refund the fees it charged to nearly 5,000 consumers and bars misrepresentations about the effectiveness of any service that purports to remove information about consumers from the broker’s website.

This is the latest in a series of FTC cases challenging companies’ failure to honor their privacy pledges.

US Search, Inc., is an online data broker that compiles public records and sells data about consumers to the public. The records may contain not only names, addresses and phone numbers, but also information such as aliases, marriages and divorces, bankruptcies, neighbors, associates, criminal records, and home values. US Search offered customers a variety of search services, including “People Search,” “Background Check,” Real Estate Reports,” and “Criminal Records/Court Records Searches.” It also offered a “Reverse Lookup” service that can return the name of an individual associated with a particular phone number or property address.

Since June 2009, US Search sold consumers its “PrivacyLock” Service, which it claimed would allow them to “lock their records” and prevent their names and other information from appearing on the company’s website, its search results, or advertisements for a year.

According to the FTC complaint, the claims were false. The agency alleged the PrivacyLock Service:

• did not block consumers’ names from showing up as an associate of someone else in a search for the other person’s name;
• did not block consumers’ information from appearing in a “reverse search” of their phone number or address, or in a search of their address in real estate records;
• did not work if the consumer changed addresses, thereby generating new records that would not be subject to the PrivacyLock; and did not work if the consumer had multiple records - for example “John Smith” and “John T. Smith.”

The settlement bars US Search, Inc. and US Search, LLC from misrepresenting the effectiveness of their PrivacyLock Service or any other service they offer that will allow consumers to remove information about themselves from search results, websites, and advertisements. The settlement order also requires that they disclose any limitations on such services and provide refunds to consumers who paid for the service.

The FTC wishes to acknowledge the assistance of the World Privacy Forum in this area.

The Commission vote to approve the complaint and accept the proposed consent agreement was 5-0. The FTC will publish an announcement regarding the agreement in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through October 22, 2010. after which the Commission will decide whether to make it final. To file a public comment electronically, please click on the following hyperlink and follow the instructions: https://ftcpublic.commentworks.com/ftc/ussearch. Written comments should be addressed to the FTC, Office of the Secretary, Room H-135, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: Consent agreements are for settlement purposes only and do not constitute an admission by the defendants of a law violation.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.