Three Information Brokers Settle FTC 'Pretext' Charges
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Three information brokers, who allegedly used false pretenses, fraudulent statements, or impersonation to obtain consumers' confidential financial information, have agreed to settle charges filed by the Federal Trade Commission (FTC). The settlements require the brokers to give up the money they made while allegedly employing those illegal methods to obtain information.

The practice of obtaining consumers' private financial information under false pretenses, known as "pretexting," is specifically outlawed by the Gramm-Leach-Bliley Act (GLB). Under GLB, it is also illegal to solicit others to obtain information via "pretext."

In April 2001, the FTC filed suit in three U. S. District Courts to halt the operations of Information Search, Inc., and David Kacala of Baltimore, Maryland; Victor L. Guzzetta, doing business as Smart Data Systems of Staten Island, New York; and Paula Garrett, doing business as Discreet Data Systems of Humble, Texas all of whom allegedly used false pretenses, fraudulent statements, or impersonation to illegally obtain consumers' confidential financial information - such as bank balances - and sell it.

The settlements bar the defendants from engaging in any activity in connection with the obtaining, offering for sale or selling of customer information of a financial institution, obtained by:

  • misrepresenting their identities or their right to receive customer information
  • using others who will obtain information using deception
  • selling or disclosing customer information obtained from a financial institution
  • making false and misleading statements

Defendants Paula Garrett and Victor L. Guzzetta will pay $2,000 each. Based on financial statements provided by defendant David Kacala, a $15,000 order for payment will be suspended.

 

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