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Thursday, July 18, 2024 | Back issues
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FTC Says Debt Broker Disclosed Too Much

(CN) - Debt broker Bayview Solutions LLC posted the debt portfolios of 28,000 consumers online, including their bank account numbers and other identifying information, the Federal Trade Commission claims in a federal lawsuit.

Bayview Solutions was established in 2008 and does business as Bayview Risk Management Capital and Bayview Commercial Recovery. It's primary business is buying and selling portfolios of commercial debt for eventual collection by third-party debt collectors.

"One way the Defendants have sold their debt portfolios is through websites that service as online marketplaces or clearinghouses for the debt collection and debt brokering industries," the FTC says in its complaint. "These websites provide a venue for debt sellers and buyers to identify one another and exchange information about debt portfolios they seek to sell or buy.

"Although catering to members of the debt collection industry, one particular website used by Defendants is a public website that is readily accessible to anyone with internet access," the complaint continues. "There are no passwords or other security methods restricting access to view posts on the website."

The agency said that generally, sellers who use the website post a summary of the portfolios they are offering, and in some instances, they might post sample portions of a given portfolio, but in doing so, they redact or mask personal identifiers that would disclose a consumer's identity or compromise their sensitive personal information.

However, in a complaint filed in the federal court in Washington, D.C., the FTC says, on at least 21 occasions, "defendants have offered their debt portfolios for sale by posting them on this website in the form of unencrypted, unprotected Excel spreadsheets. By this means they have exposed to public view consumers' sensitive personal information.

"Since July 16, 2014, alone, Defendants have posted at least twenty-one portfolios of purported debts on this website, containing the unencrypted, unmasked, sensitive personal information of more than 28,000 consumers," the complaint continues.

"In addition to significant information about the consumer's alleged debt, the information on the unprotected Excel spreadsheets has included, but has not been limited to, the consumer's first name; date of birth; city; state; consumer's email address; employer name; name of consumer's bank; consumer's full bank account number; and bank routing number; consumer's driver's license."

Compounding the harm of this activity the FTC said, is that "[t]he consumers whose sensitive personal information and purported debts Defendants have revealed would be unlikely to know that Defendants possess, and are openly disclosing, their information.

"They therefore cannot protect themselves from the harms and potential harms the disclosures cause, including possible identity theft and concomitant account fraud, invasion of privacy, and job loss," the complaint says.

The FTC asserts that there is a high likelihood of ongoing consumer injury if the practice is allowed to continue.

The agency is seeking injunctive relief against the St. Petersburg, Fla., company and its officers, Aron Tomko and Jonathan Ortiz, the rescission of the Bayview Solutions' existing contracts, and a disgorgement of all ill-gotten gains realized through the alleged activity.

Jonathan Neuchterlein is representing the agency.

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