FTC sues to stop gathering of personal data

The U.S. Federal Trade Commission (FTC) Wednesday announced that it has filed lawsuits aimed at halting the operations of three online "information brokers" that offer to locate personal financial information such as bank balances in return for fees.

The FTC is accusing the three data brokers of obtaining the information under false pretenses, an illegal practice known as "pretexting." The suits, filed in various federal courts, come three months after the commission warned companies to comply with regulations that ban impersonation and other forms of pretexting.

Being targeted by the FTC in the suits are the owners of Information Search Inc. in Baltimore; Smart Data Systems in Staten Island, N.Y., and Discreet Data Systems in Humble, Texas. The FTC said the cases are the result of an ongoing investigation into thousands of Web sites and print advertisements that offer to find personal data for a fee.

David Kacala, the owner of Information Search, Wednesday said his firm doesn't engage in pretexting while looking for information on deadbeat parents or people who have legal judgments against them. "We don't do those searches, we just farm them out to a vendor," Kacala said, adding that the other company, a law firm in California, is responsible for obtaining the information.

Victor Guzzetta of Smart Data Systems declined to comment on the FTC's suit against his firm when contacted Wednesday, while the owner of Discreet Data Systems couldn't be reached.

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