The Federal Trade Commission has sent the message that it will not allow companies to sell information to direct marketers about consumers' confidential credit card information.
On Dec. 28, the FTC filed a complaint against 10 companies and individuals who were involved in the sale of credit card account numbers and card expiration dates.
The defendants agreed to settle the FTC charges by paying $292,000 - money that will most likely be used to compensate the millions of consumers who were said to be victims of the scheme.
FTC attorneys said the settlement was determined on the basis of the defendants' profit, culpability, and ability to pay.
The lists of consumers were sold to companies that sell products and services such as memberships in shopping and travel clubs.
The FTC alleged that these telemarketers called consumers offering, for example, a 30-day free trial membership in a club. After the trial period, and without the consumers' knowledge or consent, the marketers charged consumers' credit card accounts for membership fees.
A spokesman for the Direct Marketing Association, based in Washington, D.C., said that such practices are highly unusual.
"Our ethics guidelines do not allow exchange of credit card numbers of consumers without their understanding," he said.
Attorneys for the FTC added that the agency does not object to the sale of names and addresses of consumers, but "when you sell credit card numbers and expiration dates, a potentially big fraudulent use exists."
