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FTC Fines Spokeo for Selling Personal Data Online

The Federal Trade Commission fined the tech start-up in the first case to address the sale of consumer's personal data.
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Data start-ups, take note: The Federal Trade Commission is cracking down on companies that amass and share people's personal information online.

Tech company Spokeo became the first target Tuesday. The start-up, which boasts "not your grandma's phonebook" as a tagline, was fined for selling people's Internet and social media data to other companies for the purposes of employment screening.

The Federal Trade Commission announced in a press release that the data broker agreed to pay a $800,000 fine for inaccurately marketing itself to businesses and human resource companies as an information source for future hires. According to an MSNBC report, Spokeo sold the personal data it amassed from online and offline sources to recruiters urging them to "explore beyond the resume." The FTC reported that this violated the Fair Credit Reporting Act, as the information Spokeo sold failed to protect consumers.

While there are many online sources like Spokeo that amass personal data, such as people's home addresses, phone numbers, emails, and even median income, Spokeo is the first Internet or social media company to catch the eye of the FTC in this fashion. Spokeo Founder Harrison Tang wrote on the company's blog Tuesday that it never meant to misrepresent anyone to potential employers.

"It has never been our intention to act as a consumer reporting agency," Tang wrote. "We have made changes to our site and our internal business practices in order to ensure we don’t infringe upon the FCRA’s important consumer protections, and to ensure an honest and transparent service that will continue to be easy for our customers to use."

So, while it will no longer market itself as a source for recruiters, Spokeo still provides general personal information (including the number of relatives you have and your average neighborhood income) to those who visit the site, offering more in-depth information (email, phone number, photos, and more) to paid subscribers. To remove yourself from Spokeo listings click here.

IMAGE: Courtesy Company
Last updated: Jun 14, 2012




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