A Santa Monica company that allegedly lured millions of consumers into providing sensitive information under the guise of connecting them with lenders will pay $1.5 million in civil penalties imposed by the Federal Trade Commission.
ITMedia Solutions LLC, which specializes in generating leads, will also face restrictions on its sale and use of consumer data as a result of an FTC lawsuit filed last week.
Officials of ITMedia and affiliated companies in Nevada and Utah named as defendants in the lawsuit include Michael Ambrose, Daniel Negari, Jason Ramin, Grant Carpenter, Anisha Hancock and Sione Kaufusi.
ITMedia representatives did not respond to phone calls and emails seeking comment.
Since December 2012, ITMedia has operated at least 200 Internet sites where it posts targeted advertising to consumers seeking payday loans online, consumers with poor credit, and consumers seeking personal and installment loans up to $35,000, according to the lawsuit.
Websites used by ITMedia and its affiliates to target consumers include cashadvance.com, personalloans.com, badcreditloans.com, and others with similar names. The websites represent that they find loans for consumers who complete an online form providing bank account and Social Security numbers that the business has described as a loan application or application.
To entice consumers to complete applications, ITMedia’s websites promise to share only confidential information with its network of trusted lending partners and financial providers for lending purposes.
In reality, however, ITMedia and the other defendants sold consumer information to marketing companies and others without regard to how the information would be used, according to the lawsuit.
“ITMedia tricked millions of people into giving up sensitive financial information and then sold it to companies that didn’t make loans,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The extraction and misuse of this data by the company broke the law in several ways.”
As of January 2016, approximately 84% of loan applications collected through ITMedia’s websites were not sold to lenders, but were instead distributed to marketing, debt relief, and credit repair companies that would resell loan information. consumer, the lawsuit alleges.
“In many cases, ITMedia was not even aware of the purpose for which a company was purchasing consumer data, or sometimes not even the physical location of the company,” the FTC said.
ITMedia sold consumer information to a group of companies who were sued by the FTC last year for marketing payday loan products that overcharged consumers by tens of millions of dollars.
The complaint also alleges that ITMedia violated the Fair Credit Reporting Act by illegally obtaining and reselling consumers’ credit scores, putting them at risk of identity theft and other fraudulent activities.
The defendants agreed to pay the $1.5 million civil penalty to settle the FTC charges against them.
A proposed settlement order prohibits the defendants from making misleading statements to consumers about how personal information will be used.
They are also prevented from selling consumers’ personal information outside of a limited set of circumstances and are required to screen the recipients of that information.