FTC To Probe Spokeo Data Broker Over Abuse Of Privacy

At Spokeo.com, an online data broker website, anyone can probe into your life well beyond name, age, address, e-mail address, home and cell phone numbers. Ok, when it comes to protecting privacy that’s scary enough. But now Spokeo has been accused of selling inaccurate information and violating consumer protection laws. The Center for Democracy and Technology filed a complaint with the Federal Trade Commission.

Indeed, I did a search on an entirely fake person based on a fake e-mail address and Spokeo was ready to offer up loads of information for me, none of which could possibly have been real.

CDT proclaims that Spokeo promotes the use of its services in making employment decisions by providing financial data and credit ratings, but fails to disclose its data sources or to allow consumers any opportunity to dispute and correct false information. For paid subscribers, these profiles include “Credit Estimate” and “Wealth Level” ratings as well as information about mortgage values, income, investments, lifestyles, ethnicity, religion, politics, education levels, judgments about shopping, recreational habits, Google maps of home and the amenities in a residence, as well as family relationships like the names of other adults living in a residence and the number and ages of children living there.

Spokeo advertises aggregating information from 43 social networking sites and other offline sources. In a recent interview with Fox News, Spokeo President and co-founder Harrison Tang said Spokeo grabs all the profiles, blogs, photos, videos. “Anything that you can see, basically we’ll grab it.” Tang also told Fox that his site streamlines the process of finding information about prospective employees for potential employers and job recruiters.

In this name search example, I literally searched for the term “Fake Name” and voila! Spokeo has an address, wealth indicator and more available if I become a paid subscriber.

Although Spokeo has a disclaimer that the data provided “may not be used as a factor” in establishing a consumer’s eligibility for credit, insurance, or employment, it has also marketed itself as a service for conducting background checks to aid law enforcement agencies or HR recruiters. Spokeo profiles are divided into five sections: “Basic Profile,” “Wealth,” “Lifestyle and Interests,” “Household,” and “Neighborhood.” Spokeo offers free people searches, but to find in-depth information, a person must pay $2.95 – $4.95 depending upon the length of the Spokeo subscription.

CDT claims the search results are inaccurate and a consumer is not notified if the information disclosed resulted in an adverse determination based on that data. According to CDT’s complaint filed with the FTC, “Spokeo’s business activities, including the provision of detailed consumer reports without the controls mandated by the Fair Credit Reporting Act, constitute violations of that Act, as well as unfair and deceptive practices in violation of Section 5 of the Federal Trade Commission Act.”

Searches can be conducted on Spokeo by name, email, phone or by importing friends from Yahoo, Hotmail, Gmail or AOL email address books. Unpaid users who search for an email address will see a confirmation that the email is valid as long as the domain associated with the email is a real domain. In the screenshot below, the email address is purely fictitious. In this example, I searched for information on a nonexistent person with a fake email address of spokeo_stalking_tool_u_sux@whitehouse.gov. Even though the email account does not actually exist, for the low, low price of $2.95 a year, Spokeo implies that it has extensive information about that email address.

Despite the glaring inaccuracies, Spokeo has published detailed consumer reports about millions of consumers. The complaint to the FTC maintains, “Consumers are only given an imperfect mechanism to delete their profiles, though most of those consumers would have no reason to know about or visit Spokeo to do so. Meanwhile, employers and other decision makers may be relying on Spokeo’s credit, wealth, and lifestyle data in making adverse determinations about consumers without their awareness.”

Spokeo is practically the definition of privacy invasion, claiming to receive millions of hits a day, providing vague assessments about people in a mix of “scarily correct and wildly wrong info.” From a privacy standpoint, Spokeo is a creepy tool. It hawks itself as having advantageous technology that collects “data from hundreds of online and offline sources, including but not limited to: phone directories, social networks, marketing surveys, mailing lists, government census, real estate listings, and business websites.” Spokeo also claims its advanced algorithms aggregate “scattered data into coherent people profiles, giving you the most comprehensive intelligence about anyone you want to find.” Yet Tang has admitted in press interviews that Spokeo is often inaccurate.

With CDT filing a complaint with the FTC, spooky Spokeo may be headed for spanky city.