FTC Files Complaints Against Debt Brokers For Privacy Violations

In August and October, the FTC filed two complaints (first complaint and second complaint) against debt brokers for allegedly posting debt portfolios online that contained the personal information of at least 28,000 consumers, including full bank account and routing numbers. The FTC claims that the broker's actions violate the "unfairness" prong of the FTC Act by causing consumers unavoidable substantial injury that is not outweighed by countervailing benefits to consumers or competition. The federal district court has issued preliminary injunctions against the defendants requiring notification to affected consumers and use of reasonable safeguards for consumer information in the brokers' possession.