As part of a multiyear government crackdown on scams that target people in financial distress, a federal court in Washington has ordered two consumer debt brokers to notify more than 70,000 people that they may be at risk for identity or debt fraud after the companies posted financial details and other personal information about them online.
Bayview Solutions of St. Petersburg, Fla., and Cornerstone and Company of Riverside, Calif., the entities cited by the court, are brokers that sell portfolios of supposed credit-card debts and overdue payday loans to third-party debt collectors.
The cases expose the magnitude of the personal information that debt brokers can amass — and the risks to consumers if companies fail to protect those telling details.
“More and more of our cases involve fraudsters making use of sensitive consumer data,” Jessica L. Rich, the director of the Federal Trade Commission’s bureau of consumer protection, said in an email on Wednesday evening. “It seems that they are able to obtain this information quite easily, which raises obvious concerns about the market for consumer data.”
According to a lawsuit filed by the Federal Trade Commission, Cornerstone and Company posted debt portfolios with unencrypted information on more than 42,000 consumers from all 50 states on a site for debt collectors that anyone could gain access to.
The portfolios contained significant details about consumers in addition to the debts supposedly owed, the complaint said: a first name; date of birth; contact information; employer’s name and contact information; bank name and full bank account number; credit card number; and driver’s license number.
In the lawsuit, federal regulators described the company’s public disclosures as “reckless, outrageous and unfair,” putting consumers at risk for identity theft, financial fraud and job loss. The complaint also said the company had not verified the debts that they had posted, making consumers vulnerable to predatory debt collectors who try to extract payments without the authority to do so.
“Defendants have publicly branded their victims as debtors, regardless of whether their purported debts have been verified,” regulators wrote in the complaint. “Defendants have thereby placed these consumers in jeopardy of other serious harms, such as the loss of employment and employment opportunities.”
In a separate complaint against Bayview Solutions, federal regulators similarly charged that the company had posted spreadsheets containing the “unencrypted, unmasked sensitive information” of more than 28,000 consumers.
The companies’ debt portfolios were retrieved more than 500 times, the agency said.
The website of Bayview Solutions once listed its services for debt collectors — including ways to locate consumers’ hidden assets.
Now, for people worried that their personal details may have been exposed, the site recommends that consumers review their credit card statements and call the three major credit reporting bureaus to place a fraud alert on their files. It also directs people to an F.T.C. hotline.
Bayview Solutions did not return an email and a phone message seeking comment. Cornerstone and Company could not be reached for comment.
“In this case, the two debt brokers simply posted the sensitive information of tens of thousands of consumers for sale without any regard for the very serious risks that created,” said Ms. Rich of the F.T.C. “I am very concerned about this trend, and we will be taking additional actions to address it.”