Spokeo, a "people search engine" that builds and sells detailed profiles of people by aggregating online and offline data, has agreed to pay the US Federal Trade Commission $800,000 over allegations that it violated consumer protections laid out in the Fair Credit Reporting Act (FCRA). Spokeo, the FTC alleges, acted as a consumer reporting agency but did not make sure that it was selling accurate information or ask that its customers (often employers running background checks) state they would only use reports for legally allowed purposes, both of which are required under the FCRA. It also allegedly posted its own fake outside endorsements on news websites and blogs.
As part of the agreement, Spokeo must make sure it checks who is buying its reports and require buyers to agree to use the data legally, rather than simply including it in a blanket terms of service. It must also fix any other violations and refrain from misleading endorsements. The FTC says this is its first case to deal with selling data from social media or other online sources in the context of employment screening. Spokeo, for its part, says that "it has never been our intention to act as a consumer reporting agency" but has agreed to comply with the law.