FTC Cracks Down on Internet Pretexter

The Federal Trade Commission (FTC) made it clear today that it won’t tolerate any pretexting, barring an online business from advertising and selling consumers’ phone and credit card account records to third parties.

The FTC said in a statement that Integrity Security & Investigation Services (ISIS) and its principal, Edmund Edmister, agreed to settle charges that it violated federal law*.

The FTC said that after obtaining the phone records and credit card transaction reports, ISIS sold them to interested parties.

ISIS agreed not to obtain or sell consumers’ confidential phone and credit account records unless authorized by law or court order. The business will also forfeit the $2,700 it earned from selling the phone records and credit card transaction reports.

The settlement also contains standard record keeping provisions to allow the FTC to monitor ISIS’ compliance with its order.

The FTC dismissed charges against ISIS corporate officers F. Lynne Moseley and Tracey Edmister, whom the agency determined played no role in operating the business.

Pretexting, or obtaining records using false pretenses, is one of the biggest bugbears on Capitol Hill these days; it was the chief method of reconnaissance in an HP scandal in which the company’s board chairman and legal counsel hired firms to spy on reporters they believed were receiving information leaks.

Those top-level HP personnel and the individuals they hired to snoop on reporters were indicted yesterday in a criminal felony complaint filed in California’s Santa Clara County Superior Court.

Former Hewlett-Packard Chairwoman Patricia Dunn will surrender to authorities at 2 p.m. PDT at Santa Clara County Superior Court to set an arraignment date.

Meanwhile, Congress is considering legislation that would make pretexting illegal.

The FTC’s settlement with ISIS comes just five months after it filed complaints charging five Web-based operations with violating federal law by pretexting.

The four other cases are still in litigation.

*Updates to reflect that Edmister agreed to violating federal law.

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