Markey Urges FTC to Launch Formal Investigation of Data Broker

WASHINGTON, DC -- Representative Edward J. Markey (D-MA), a senior member of the House Energy and Commerce Committee and co-chair of the Congressional Privacy Caucus, today released a letter from the Federal Trade Commission (FTC) responding to his May 21, 2007 letter to FTC Chairman Deborah Platt Majoras about telemarketers using lists purchased from a database company, infoUSA, to prey upon vulnerable seniors and raid their bank accounts.

Both Rep. Markey’s letter and the FTC’s response can be found at the bottom of this release.

Rep. Markey said, “It is outrageous and unconscionable that companies such as infoUSA appear to be profiting by enabling fraudsters to prey on vulnerable, lonely and sick seniors. The FTC response to my letter indicates that telemarketing fraud continues to be a major problem affecting consumers, and I urge the FTC to open a formal investigation to probe whether infoUSA knew, or should have known, that it was abetting fraud.” said.

Rep. Markey initially wrote to the FTC after the New York Times reported on Sunday, May 20th that the database company, infoUSA, advertised and sold lists of millions of “gullible” seniors divided into groups of people “looking for ways to make money,” people with cancer or Alzheimer’s disease or repeated gamblers. After criminals used these lists to contact seniors and trick them into revealing their banking information, they stole millions. Bank and consumer database companies continued working with criminals even after they were alerted to the crimes, according to federal regulators.

The FTC response:

• Reports that from 2003-2006, there have been 135 federal district court orders entered for a total of $370 million for consumer redress in cases FTC has brought in the area of telecommunications fraud; 23 federal district court orders entered in FTC cases resulting in $16 million in civil penalty orders; and 21 orders with injunctive relief alone;
• States that “FTC staff has contacted the appropriate federal banking regulators to discuss the activities described in the New York Times article.”
• Acknowledges that “the Commission currently subscribes to infoUSA’s ‘Reference USA’ database of business, residential, Canadian, and Health directory listings, but not to any other service provided by infoUSA.”.

“In addition to urging the FTC to open an investigation, I also intend to pursue this issue with the financial regulators to ascertain the linkage between these fraudsters and the financial institutions they use to drain money from victims’ accounts, as well as the banking regulators’ efforts to severe this linkage,” Rep. Markey said.

Rep. Markey's letter to the FTC (pdf)

FTC response to Rep. Markey (pdf)

June 6, 2007

CONTACT: Jessica Schafer (Markey)