In May 2006, the FTC charged AccuSearch, Inc., doing business as Abika.com, and its principal, Jay Patel, with violating federal law by selling consumers' phone records to third parties without the consumers' knowledge or authorization. According to the FTC complaint, the defendants advertised on their Web site that they could obtain the confidential phone records of any individual -- including details of outgoing and incoming calls -- and make that information available to their clients for a fee.
To obtain such information, which is not legally available to the public, the defendants caused others to use "false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as a customer of a telecommunications carrier," to induce the telecommunications carriers to disclose the confidential records. Consumers whose phone records were sold by defendants suffered substantial injury as a result of those sales.
In his ruling, Judge Downes found that the defendants' obtaining and selling of confidential phone records without consumers' knowledge or consent was "necessarily accomplished through illegal means," and that defendants knew that the phone records were being obtained surreptitiously.
The court further found that this practice caused substantial injury to consumers, including: serious health and safety risks experienced by some consumers from stalkers and abusers; economic harm associated with changing telephone carriers and upgrading security on their accounts; and a host of "substantial and real" emotional harms. The court concluded that consumers had no way to avoid these harms.
"In fact," Judge Downes wrote, "the evidence presented before the court indicates that confidential consumer phone records were sold through Abika.com despite considerable efforts by consumers to maintain the privacy of those records." Finally, the court found no countervailing benefits to consumers or competition that could be derived from defendants' practice.
Judge Downes also rejected the defendants' claimed immunity under Section 230 of the Communications Decency Act (CDA), a federal statute that confers immunity on interactive computer service providers for publishing information content provided by a third party.
The judge's order requires the defendants to give up the $199,692.71 in ill-gotten gains they earned through illegally obtaining and selling the records. The order also authorizes the FTC to notify the individuals whose phone records were sold by defendants, to the extent that those consumers can be located. The order allows the FTC to use the forfeited ill-gotten gains for this purpose. Finally, the order contains certain bookkeeping and record keeping requirements to allow the FTC to monitor compliance.
