Last week, the U.S. District Court for the Northern District of California dismissed three of six claims the Federal Trade Commission asserted against D-Link Systems related to its sale of routers and IP cameras and related software and services. The decision has implications for the pleading standards courts use to evaluate such claims at the motion to dismiss stage and for the FTC’s assertion of unfairness claims based on alleged likelihood of substantial consumer harm.
Tag Archives: Unfair Practices
FTC Settlement Reinforces Lessons for Data Broker Industry
The FTC has brought a number of actions over the years against companies that shared or failed to protect consumer information in violation of privacy policy promises or transferred data in violation of specific laws, such as the Fair Credit Reporting Act. In what may be viewed as charting new territory, the FTC recently brought a second action against a data broker for selling payday loan application information to entities that were not engaged in making any kind of loans to consumers. Both sets of defendants purchased payday loan application information from online payday loan websites where consumers provided personal information, including financial institution account information, on the applications. The defendants purchased the application information from the websites and sold the information to third parties who did not make payday loans to consumers, but rather made unauthorized charges to consumers’ accounts. The Commission alleged that the selling of such sensitive information was unfair.
FTC Complaint Offers Lessons for Data Broker Industry
Two weeks ago, the FTC filed a district court complaint in Arizona against an operation that included three corporations and one individual. While touted as a case against data brokers (“FTC Charges Data Broker with Facilitating the Theft of Millions of Dollars from Consumers’ Accounts”), the single count unfair trade practices action really involves fraudulent and egregious conduct that took advantage of a particularly vulnerable population, but it nevertheless provides a few lessons for the data broker industry generally.