Two debt brokers agreed to settle Federal Trade Commission charges that they exposed highly sensitive information about tens of thousands of consumers while trying to sell portfolios of consumer debt on a public website.
In separate cases filed last year against Cornerstone and Company LLC and owner, Brandon Lambert, and against Bayview Solutions LLC and owner Aron Tomko, the FTC alleged the brokers posted unencrypted documents online - in Excel spreadsheets - containing consumers' names, addresses, credit card numbers, bank account numbers and amounts the consumers allegedly owed.
That meant any visitor to the site could access and download the sensitive information. The site where the information was posted caters to the debt collection industry but was open to public viewing. The FTC alleges that the portfolios were accessed at least 500 times.
The agreements with the FTC require the defendants to abide by strict new requirements to protect consumers sensitive information.The FTCs complaints alleged that by disclosing consumers information online, the defendants exposed those consumers to risks ranging from identity theft to "phantom debt" collection. Phantom debt collection involves predatory debt collectors who try to extract payments from consumers without the authority to collect them.A federal court ordered the website hosting the sensitive information to take it down immediately. It also ordered the defendants to notify the affected consumers that their information had been exposed and of steps they could take to protect themselves.Under the settlements, the defendants must establish and maintain security programs that will protect consumers sensitive personal information. The companies also must have their security programs evaluated both initially and every two years by a certified third party.
The FTCs complaints alleged the defendants violated the FTC Act. Officials with the companies were not immediately available for comment.