DATA-MINING FIRMS SUED OVER BANK ACCOUNT INFO

As reported by Newsbytes, the Federal Trade Commission (FTC) has filed suit against three data mining firms accused of obtaining and selling consumers' financial and bank account information under false pretenses.

The FTC cases, brought in three separate US district courts, target Baltimorebased Information Search Inc; Smart Data Systems in Staten Island, New York; and Humble, Texas-based Discreet Data Systems.

The commission said all of the companies advertised the ability to locate non-public financial information, including savings account numbers, balances, mutual fund accounts and safe deposit box locations, all for fees ranging from $100 to $600.

In court filings, the FTC said it set up sting operations using dummy bank accounts created using the names of cooperating witnesses and then called the companies posing as customers.

The sting operations stemmed from a crackdown the commission began earlier this year on the practice, known as "pretexting." In January, the FTC sent a letter to more than 200 Web sites offering financial search services, warning against the practice of using forged documents or making phony phone calls in order to obtain sensitive consumer information from a financial institution or directly from the consumer.

The commission warned that it would continue to monitor the other data firms and their advertisements for signs of pretexting, which is prohibited under the Gramm-Leach-Bliley Act of 1999. Violators of could be fined up to $11,000 for each violation, as well as criminal penalties, the FTC said.

For more information on the FTC action, check out: www.ftc.gov/opa/2001/04/pretext.htm.