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EPIC: Lawyers Drive Phone Data Black Market

Forget stalkers and ex-spouses as the primary consumers of online black market phone data.

The Electronic Privacy Information Center (EPIC) says lawyers are the primary buyers driving the market, raising significant ethical issues for the legal profession.

EPIC prompted a series of hearings and investigations involving Congress, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) last summer when it complained about online data brokers selling confidential phone records.

The investigations have so far focused on the identities of the data brokers, how they obtain the information and what legal loopholes they are using to sell the information.

According to EPIC, the FCC and telephone carriers, the brokers get the data by impersonating the consumer and conning service representatives out of the information, a practice known as pretexting.

As the answers come in, so does evidence concerning the buyer of the information.

"There is mounting evidence that attorneys are top consumers of pretexting services that acquire private records through impersonation, fraud or false pretenses," EPIC wrote in a letter this week to state bar associations.

"In fact, the operators of these sites offering records claim that attorneys are employing their services."

EPIC claims attorneys paying the data brokers or urging clients to use the brokers' services are operating in a legal gray zone.

"We believe attorneys who hire investigators or other companies to engage in pretexting violate ethical norms," the letter states. "Attorneys have a duty to be zealous advocates of their clients but must operate within the bounds of law."

The letter adds, "An attorney cannot hire others to operate outside the bounds of law, and we believe that this practice of hiring pretexters or counseling clients to hire them implicates [American Bar Association ethics]."

In testimony before a Senate panel earlier this month, Robert Douglas, an identity theft expert and CEO of PrivacyToday.com, told lawmakers the "overwhelming majority" of phone records are purchased by attorneys, private investigators (who are often working for attorneys), skip tracers, debt collectors and the news media.

"Each of these categories of users and purchasers have at one time or another made impassioned pleas to me that they need access to phone records -- outside of normal judicial review processes -- to conduct what they argue are socially beneficial services," Douglas testified.

Attorneys use the records as a means of discovery in numerous types of litigation, from divorce to criminal defense to business intelligence.

Private investigators, skip tracers and debt collectors find the information useful in locating witnesses and developing leads.

The news media -- especially the tabloids, according to Douglas -- buy confidential phone records to track celebrity lives and to develop their own leads in national stories.

"These buyers and their thirst for the information contained in detailed phone billing records resulted in the market and the cash flow that fed and encouraged the online sale of phone records," Douglas said.

He further testified that methods for "stealing" phone records have been known and in use for decades.

"With the advent of the Internet and the World Wide Web, it was only a matter of time before some illicit information broker or private investigator decided to advertise the availability of phone records on the Web," he said.

From there, Douglas said, greed, not law or ethics, became the name of the game.

"Once the first ads appeared and other brokers and investigators learned how much money could be made selling phone records via the Internet -- in some instances more than a million dollars per year for small operations -- the feeding frenzy was on," he said.