The Federal Trade Commission has handed out $800,000 in fines to data collector Spokeo, alleging that the web platform violated the Fair Credit Reporting Act by marketing consumer profiles without giving the assurance that those profiles would be used for legal purposes.
Essentially Spokeo gathered information from social networking sites and then sold that information.
The FTC also found that Spokeo failed to ensure the accuracy of the data it collected and failed to inform customers of the company’s federal responsibilities with regard to handling consumer data.
The company was also accused of making fake endorsements in its marketing campaigns, endorsements that included Spokeo employees touting themselves as users of the service on various website forums.
According to the Federal Trade Commission Spokeo engaged in its illegal activities from 2008 to 2010. The agency says Spokeo sold “coherent people profiles” that contained income, home worth, marital status, ethnicity and other information. Some information was also provided for free via the Spokeo website. Information was sold to human resource departments, background screening services and recruiters.
Spokeo reached the $800,000 settlement amount after working closely with the Commission in charge of levying the fine.
The FTC voted 4-0 in favor of the fine. One commissioner who was not participating referred Spokeo to the Justice Department for possible further charges.
Spokeo revealed on its own company blog that it has made changes to its website and internal business practices in order to fall into compliance with the Fair Credit Reporting Act. Amusingly Spokeo claims they are a technology company that is actually organizing people’s data for their “own good.”