On December 17, the Consumer Financial Protection Bureau took action against two major lead aggregators – D and D Marketing, Inc. d/b/a T3 Leads (“T3 Leads”) and Eric V. Sancho d/b/a Lead Publisher (“Sancho”) – seeking monetary and injunctive relief for the alleged unfair and abusive trafficking of personal information. 

Lead aggregators buy consumer information, referred to as “leads,” from lead generators – websites that advertise loans and through which consumers submit loan applications.  The lead aggregators then sell the leads to lenders and other lead purchasers, including online payday and installment lenders. 

The CFPB filed a complaint against T3 Leads and the company’s owners, Grigor and Marina Demirchyan.  According to the Complaint, T3 Leads “failed to vet or monitor its lead generators and lead purchasers, which exposed consumers to the risk of having their information purchased by illegal actors.”  Further, T3 Leads allegedly “allowed its lead generators to attract consumers with misleading statements and has taken advantage of consumers’ lack of understanding of the material risks, costs, or conditions of the loan products for which they apply.”  The CFPB charges T3 Leads with unfair and abusive acts and practices in violation of the Consumer Financial Protection Act of 2010 (“CFPA”). 

The Bureau seeks monetary relief against T3 and its owners, as well as permanent injunctive relief to prevent T3 from continuing to engage in such illegal practices.   

In a separate but similar action, the CFPB entered into a consent order with Sancho on December 17 for violations of the CFPA.  Sancho sold leads, including names, addresses, occupations, telephone numbers, home and email addresses, and bank-routing and account numbers, to entities engaged in a fraudulent debt-collection scheme.  Over the course of eight transactions, Sancho sold roughly three million consumer leads.  The consent order asserts that Sancho “took no steps to determine how the consumer information he sold would be used, or to verify that the entities to which he sold it were engaged in legitimate businesses.”   

Per the terms of the consent order, Sancho must disgorge $21,151 he made illegally, and he is permanently banned from offering or providing any consumer financial product or service, including consumer leads. 

In a statement released with these two enforcement actions, CFPB Director Richard Cordray declared, “This is a reminder to the middlemen who traffic in personal information: if you ignore warning signs that those buying this data are violating the law, you risk the consequences for the harm you are doing to people.”