Internet Pretexter Dials Up FTC Settlement

An Internet vendor of confidential telephone numbers obtained through pretexting agreed today to settle Federal Trade Commission (FTC) charges it violated federal law. The settlement bars Information Search and its principal, David J. Kacala, from obtaining, marketing or selling customer phone records.

Information Search also agreed to discontinue pretexting — obtaining records using false pretenses — or hiring others who pretext to obtain phone records. In addition, the settlement imposes a $40,075 judgment against the Information Search, although all but $3,000 of the judgment was suspended based on financial declarations by the company.

Information Search is one of five Web-based operations charged in May of last year with obtaining and selling consumers’ confidential telephone records to third parties. According to the FTC, the defendants advertised on their sites they could obtain the confidential phone records of any individual, including lists of outgoing and incoming calls, and make that information available to their clients for a fee.

“The complaints allege that the defendants, or persons they hired, obtained this information by using false pretenses, including posing as the carrier’s customer, to induce the carrier’s employees to disclose the records,” the FTC’s Lydia Parnes said Friday at a House hearing on pretexting.

Information Search’s settlement ends the litigation against the company. Integrity Security & Investigation Services, another one of the companies charged, has also settled with the FTC. The other three cases remain in litigation.

The agency is seeking permanent injunctions halt to the sale of the phone records by the three companies and has asked the courts to order the operators to give up the money they made through their illegal scheme.

Because the charges were brought before Congress passed legislation last year criminalizing pretexting, none of the companies will be subject to the new federal sanctions that subject violators to up to 10 years in prison and a maximum fine of $500,000.

Instead, the FTC relied on the Telecommunications Act of 1996 to bring charges. The Act states that customers’ phone records are their private property and can only be disclosed to the customer or with the approval of the customer.