The Federal Trade Commission (FTC) on October 1, 2008, reached a settlement with list broker Glenn L. Patten and two companies he operates (“Patten”). The FTC alleged that Patten, both individually and doing business as Glenn L. Patten Marketing Solutions and Marketing Solutions, engaged in deceptive acts in violation of the FTC Act and the Telemarketing Sales Rule. Patten allegedly sold or rented “full data leads” to telemarketers, without obtaining prior consent from consumers, when Patten knew or consciously avoided knowing that the telemarketers were promoting advance fee credit products. The “full data leads” included consumers’: (1) bank account and routing information, (2) credit card numbers, (3) credit card security codes, and (4) credit card expiration dates. Additionally, Patten allegedly provided telemarketers with unencrypted consumer account numbers (e.g. credit or debit card numbers, bank account numbers, and PINs,) in violation of the TSR.
If the settlement is approved by U.S. District Court for the Northern District of Illinois, Eastern Division, Patten will be prohibited from directly (or assisting others in) collecting, selling, renting, brokering, purchasing, transferring, or otherwise disclosing consumers’ account numbers, to, from, for, or with any unaffiliated third party for marketing purposes. This prohibition, however, does not prevent Patten from collecting the account and disclosing numbers of his own customers for the purpose of completing authorized transactions. Additionally, the order requires Patten to:
- turn over to the FTC all his lists of consumers’ account numbers;
- monitor the advertising and promotional materials and activities of his clients to determine the nature of products or services sold to consumers;
- investigate any complaint or refund request regarding the practices of Patten’s clients;
- terminate services to any person whom he knows or should know is engaging in misrepresentations to any consumer’s decision pertaining to offered transactions or the billing of accounts without consumer authorization; and
- provide the FTC with all relevant information of any person to whom Patten terminates services.