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FTC Vows to Stop Illicit Sale of Cell Phone Calling Records

Date: 11/7/2007 2:53:00 PM

An entire industry of companies offering to provide purchasers with the cellular and land line phone records of third parties has developed, the Federal Trade Commission told a Senate committee.


The agency is currently investigating companies that appear to be engaged in telephone "pretexting," as the sale of consumer telephone records is called, according to Lydia Parnes, Director of the FTCs Bureau of Consumer Protection.

"Companies that engage in pretexting – the practice of obtaining personal information, such as telephone records, under false pretenses – not only violate the law, but they undermine consumers confidence in the marketplace and in the security of their sensitive data," Parnes said.

"While pretexting to acquire telephone records has recently become more prevalent, the practice of pretexting is not new," she said. "The Commission has a history of combating pretexting."

The first FTC law enforcement action targeting operators who used false pretenses to gather financial information occurred in 1999. The company offered to provide consumers financial records for a fee.

The agency alleged the companys employees obtained the records from financial institutions by posing as the consumer whose records it was seeking. The Commission charged that the practice was unfair and deceptive and violated the FTC Act.

Following passage of the Gramm Leach Bliley Act (GLBA), which specifically prohibits pretexting of customer data from financial institutions, the agency launched Operation Detect Pretext in 2001.

"Operation Detect Pretext combined a broad monitoring program, the widespread dissemination of industry warning notices, consumer education, and aggressive law enforcement," Parnes said.

It followed up the first phase of Operation Detect Pretext with a trio of law enforcement actions against information brokers.

"Because the antipretexting provisions of the GLBA provide for criminal penalties, the Commission also may refer pretexters to the U.S. Department of Justice for criminal prosecution, as appropriate. One such individual recently pled guilty to one count of pretexting under the GLBA," she said.

Parnes testified before the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Affairs, Product Safety, and Insurance.  Phone Card News Stats


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