A data broker was charged on Tuesday by the Federal Trade Commission with selling sensitive personal and financial information that allowed consumers to be scammed out of millions of dollars.
The information that was sold by LeapLab, details taken from payday loan applications, allowed money to be directly taken from victim's accounts, the FTC said. That information was sold to marketing companies, including Ideal Financial Solutions -- which has also been charged in another FTC case -- which allegedly used the data to make this withdrawals without permission.
"This case shows that the illegitimate use of sensitive financial information causes real harm to consumers," Jessica Rich, director of the FTC's Bureau of Consumer Protection, said in a statement. "Defendants like those in this case harm consumers twice: first by facilitating the theft of their money and second by undermining consumers' confidence about providing their personal information to legitimate lenders."
The information that was sold had been collected by websites that help cash-strapped applicants try to find suitable loans. Among the information provided in the applications are bank account numbers and Social Security numbers, as well as the consumer's name, phone number, address and employer.
About 5 percent of the applications were sold to online lenders for $10 to $150 each, the FTC said. However, the FTC alleges the rest was sold for about 50 cents apiece to companies that had no legitimate use for the data.
That included operations that peppered those who filed applications with emails, text messages and other solicitations.
The FTC said that Ideal Financial Solutions bought data on at least 2.2 million consumers over a four-year period and use it to take money from accounts "for purported financial products that the consumers never purchased."