After alleging in two separate cases that two debt portfolio brokers – Cornerstone and Co. LLC and Bayview Solutions LLC – were exposing too much personal information about consumer-debtors, the Federal Trade Commission announced that the parties have reached final settlements.

Specifically, in the cases of Federal Trade Commission v. Cornerstone and Company, LLC, et al., Case No. 1:14-cv-01479-RC, and Federal Trade Commission v. Bayview Solutions, LLC, et al., Case No.  1:14-cv-01830-RC, the FTC alleges that Cornerstone and Bayview Solutions were exposing the personal information of consumers in their efforts to sell consumer debt portfolios on a public website.  These postings, while encrypted, contained certain personal information related to consumers, including names, addresses, credit card numbers, bank account numbers, and amounts the consumers allegedly owed.  The FTC feared that the actions by Cornerstone and Bayview Solutions could open up consumers to identity theft and/or predatory debt collectors.  In both of these cases, the United States District Court for the District of Columbia ordered that the website that hosted the consumer information, which was provided by Cornerstone and Bayview Solutions, be taken down.

In each of the Stipulated Final Order for Permanent Injunctions, Cornerstone and Bayview Solutions, and their respective owners, have agreed to establish and maintain security programs that will protect consumers’ personal information.  Further, Cornerstone and Bayview Solutions have agreed to have these security programs routinely evaluated by a certified third party.

In November, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, stated, “[D]ebt brokers and collectors who play fast and loose with people’s sensitive personal and financial information are causing tremendous harm.”

These cases illustrate that the FTC is focused on protecting consumer information and is working with debt brokers and sellers to implement appropriate procedures to mitigate the risk of exposure of consumers’ personal information.