Company accused of selling illegally obtained personal data to robocallers settles with FTC

A California company accused of tricking customers into handing over personal information for fake mortgage loans and other sham services, and then selling the data to telemarketers, has settled with the Federal Trade Commission (FTC).

The company, Response Tree LLC — a so-called lead generator — tricked consumers with dark patterns and lies and in so doing enabled millions of robocalls, the FTC alleged. The settlement includes a $7 million fine, which has been suspended because Response Tree says it can’t pay it, and an agreement that the company will no longer facilitate robocalls.

The FTC said Response Tree ran more than 50 websites which purported to offer services but were really just “consent farms” designed to deceptively obtain information. The company allegedly peddled the personal data of hundreds of thousands of consumers to telemarketers making illegal calls.

Telemarketers selling notoriously exploitative products such as extended auto warranties used Response Tree leads to facilitate calls, the FTC said. The calls were made to numbers included on the national Do Not Call registry, which made them illegal, according to the FTC and Department of Justice’s complaint.

Response Tree website PatriotRefi.com, along with others, hid inadequate disclosures about how the personal information consumers provided to get fake loans would be used, the agency said.

The company sold the information to third-party telemarketers by claiming the consumers agreed to receive robocalls because they participated in the phony service agreements, the agency said.

The complaint said Response Tree executives knew consumers had not adequately consented but sold the information anyway.

The PatriotRefi.com website, for example, allegedly tricked consumers into clicking on a “GET YOUR FAST FREE QUOTE” button and then retained the personal data.

Most of the consumers who clicked the button allegedly never received quotes for refinancing.

“The FTC will continue to target every corner of the illegal telemarketing ecosystem to protect consumers and hold wrongdoers accountable,” Samuel Levine, director of the Bureau of Consumer Protection, said in a prepared statement.

At its most active, the Response Tree consent farms peddled an average of 10,000 illegal leads for sale daily and sometimes as many as 50,000, the FTC said.

A court must approve the proposed settlement before it takes effect.