In the first Federal Trade Commission (FTC) case to address the sale of Internet and social media data in the employment screening context, Spokeo, Inc. – a data broker that compiles and sells detailed information profiles on millions of consumers – has agreed to pay a $800,000 fine to settle FTC charges that the company marketed profiles to companies in the human resources, background screening, and recruiting industries without taking steps to protect consumers required under the Fair Credit Reporting Act (FCRA), according to an FCT press release. The FTC charged that Spokeo operated as a Consumer Reporting Agency (CRA) that violated the FCRA by:
- Failing to make sure that the information it sold would be used only for legally permissible purposes;
- Failing to ensure the information was accurate; and
- Failing to tell users of its consumer reports about their obligation under the FCRA, including the requirement to notify consumers if the user took an adverse action against the consumer based on information contained in the consumer report.