FTC Charges Data Broker with Facilitating the Theft of Millions of Dollars from Consumers’ Accounts


FTC Charges Data Broker with Facilitating the Theft of Millions of Dollars from Consumers’ Accounts

Company Sold Personal Financial Information to Scammers

For Release

A data broker operation sold the sensitive personal information of hundreds of thousands of consumers – including Social Security and bank account numbers – to scammers who allegedly debited millions from their accounts, the Federal Trade Commission charged in a complaint filed today.

According to the FTC’s complaint, data broker LeapLab bought payday loan applications of financially strapped consumers, and then sold that information to marketers whom it knew had no legitimate need for it. At least one of those marketers, Ideal Financial Solutions – a defendant in another FTC case – allegedly used the information to withdraw millions of dollars from consumers’ accounts without their authorization.

“This case shows that the illegitimate use of sensitive financial information causes real harm to consumers,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “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 defendants collected hundreds of thousands of payday loan applications from payday loan websites known as publishers. Publishers typically offer to help consumers obtain payday loans. To do so, they ask for consumers’ sensitive financial information to evaluate their loan applications and transfer funds to their bank accounts if the loan is approved. These applications, including those bought and sold by LeapLab, contained the consumer’s name, address, phone number, employer, Social Security number, and bank account number, including the bank routing number.

The defendants sold approximately five percent of these loan applications to online lenders, who paid them between $10 and $150 per lead. According to the FTC’s complaint however, the defendants sold the remaining 95 percent for approximately $0.50 each to third parties who were not online lenders and had no legitimate need for this financial information.

The Commission’s complaint alleges that these non-lender third parties included: marketers that made unsolicited sales offers to consumers via email, text message, or telephone call; data brokers that aggregated and then resold consumer information; and phony internet merchants like Ideal Financial Solutions. According to the FTC’s complaint, the defendants had reason to believe these marketers had no legitimate need for the sensitive information they were selling.

In the FTC’s case against Ideal Financial Solutions, between 2009 and 2013, Ideal Financial allegedly purchased information on at least 2.2 million consumers from data brokers and used it to make millions of dollars in unauthorized debits and charges for purported financial products that the consumers never purchased. LeapLab provided account information for at least 16 percent these victims.

The complaint notes that LeapLab hired a key executive from Ideal Financial as its own Chief Marketing Officer and then knew that Ideal used the information purchased from it to make unauthorized debits. Yet, the complaint alleges, the defendants continued to sell such information to Ideal.

The defendants in the case, Sitesearch Corp., LeapLab LLC; Leads Company LLC; and John Ayers, are alleged to have violated the FTC Act’s prohibition on unfair practices.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the District of Arizona, Phoenix Division.

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 case will be decided by the court.

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 2,000 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. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

Jay Mayfield
Office of Public Affairs

James Kohm
Bureau of Consumer Protection

T-Mobile refunds

Tmobile Refunds

T-Mobile will give full refunds to customers who had unwanted third-party charges placed on their bills for subscriptions they did not order – including horoscope texts, ringtones, celebrity gossip and more – a practice known as mobile cramming. The company is paying at least $90 million to settle a Commission lawsuit. T-Mobile has been contacting its current and former customers who were crammed to let them know about T-Mobile’s refund program.

Shady data broker


According to the FTC, a data broker sold the sensitive personal information of hundreds of thousands of people – including Social Security and bank account numbers – to scammers who used the information to take millions of dollars from the people’s accounts. The Commission says that LeapLab bought payday loan applications that included the applicant’s name, address, phone number, employer, Social Security number and bank account number, and then sold that information to marketers – knowing they had no real need for it. At least one of those marketers, Ideal Financial Solutions, allegedly used the information to withdraw millions of dollars from people’s accounts without their consent.

Deceptive talk about speech disorders


NourishLife, LLC agreed to stop making claims that the FTC says are deceptive – namely that the company’s dietary supplements are proven to be effective at treating childhood speech disorders, including those associated with autism. The FTC says the company didn’t have the proper scientific evidence to back up its claims. The company sold Speak softgels and capsules, and Speak Smooth liquid children’s supplements for more than $70 per bottle. The company also conveyed its claims through dramatic testimonials from parents, some of whom received free supplies of the supplement.

Warts and all bogus claims

bogus wart removal and weight loss claims

Two companies that market skin care and weight-loss productsagreed to stop making false or unproven claims about their products. In one case, the FTC challenged ads for DermaTend, a skin cream promoted for do-it-yourself removal of moles, skin tags, and warts, and Lipidryl, a supplement promoted for weight loss. In the second case, the agency challenged claims for Photodynamic Therapy anti-aging lotions, as well as Shrinking Beauty, a supposed body-slimming lotion based on “lobster weight loss inspired technology.” The FTC settlements in both cases stop the companies from misleading people about the effectiveness of their products and whether their claims are backed by reliable scientific evidence.

Canine meds dogged

Dog Meds

Global pharmaceutical company Eli Lilly agreed to divest a line of canine heartworm medications to settle FTC charges that its $5.4 billion acquisition of Novartis Animal Health would likely lead to higher prices for dog owners. According to the FTC, Eli Lilly’s Trifexis and Novartis Animal Health’s Sentinel products are particularly close substitutes because they are the only two products that are given orally once a month, contain the same active ingredient, and also treat fleas and other internal parasites in dogs. Under the proposed settlement, Eli Lilly will divest the Sentinel product line to French pharmaceutical company, Virbac.

Back it up

Back it Up Video

The FTC has a new video, Back It Up: Don’t Lose Your Digital Life, that advises people to back up their digital files once a week. From the family budget to photos, the files on your computer are valuable. So back them up!

“Mobile cramming is an issue that has affected millions of American consumers, and I’m pleased that this settlement will put money back in the hands of affected T-Mobile customers. Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more.

— FTC Chairwoman Edith Ramirez

App collects kids’ locations

The FTC sent a letter to BabyBus, a China-based developer of mobile apps directed to children ages one to six, warning that the company may be in violation of the Children’s Online Privacy Protection Act (COPPA). In the letter, the FTC notes that the child-directed apps marketed by the company seem to collect precise geolocation information about users. The letter notes that the company does not get parents’ consent before collecting this personal information, which is against the law.

Tricked out car ad

Trophy Nissan, an auto dealer in Dallas, agreed to settle FTC charges that it used misleading ads to promote the sale and lease of its vehicles, including an ad that claimed car buyers could get out of their current loan or lease for $1. The FTC charged that Trophy advertised enticing prices, lease and finance terms, and promotions, and then tried to disclaim its attractive offers using small text in print and video ads.

Snapchat snafu

The FTC settled charges with Snapchat, after the company misled people with promises that messages sent through the service would disappear quickly and permanently. According to the FTC, the company also deceived people over the amount of personal data it collected and the security measures taken to protect that data from being disclosed without authorization. The settlement prohibits Snapchat from misrepresenting how it maintains the privacy, security, or confidentiality of users’ information.


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