The marketing company agreed to pay $ 150 million to OPA for anti-fraud facilitation efforts for the elderly

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Epsilon Data Management LLC (Epsilon), one of the largest marketing companies in the world, has reached a settlement with the Justice Department to resolve a criminal charge for selling information from millions of Americans to perpetrators of older fraud programs.

Epsilon entered into a Deferred Prosecution Agreement (DPA) with the Consumer Protection Division of the Civil Department of the Department of Justice and the U.S. Attorney’s Office for the Colorado District in connection with a criminal complaint alleging the company was charged with a conspiracy to commit mail and wire transfer Amounted to.

Pursuant to Data Protection Agency regulations filed by the parties with the Denver District Court on January 19, 2021, Epsilon agreed to pay a total of $ 150 million, of which $ 127.5 million were victims of the fraudulent systems used Should compensate consumer data sold by Epsilon. Epsilon has also agreed to take important compliance measures to protect consumer data and prevent sales to individuals or companies involved in fraudulent or misleading marketing campaigns. In addition, the Data Protection Agency requires Epsilon to follow a process by which consumers request that they not sell their information to others.

Epsilon is headquartered in Irving, Texas and has a main sales office in Westminster, Colorado. Sophisticated data modeling has identified consumers who are most likely to respond to their customers’ marketing inquiries. As part of the data protection authority, Epsilon admitted that employees in the DTC (Direct to Consumer) department knowingly sold modeled consumer lists to fraudulent customers from July 2008 to July 2017. In particular, Epsilon acknowledged that the DTC division had been selling consumer lists to a number of bulk mailing fraud programs that sent fake “sweepstakes” and “astrology” requests to consumers. In those inquiries, it was stated that each consumer recipient had won a grand prize or individual mental health service that they could obtain for a fee. In reality, the inquiries – as known to the DTC department – were mass mailings, and victims who paid a fee received nothing of value. As can be seen from the consumer lists sold by the DTC department to the perpetrators of the fraud programs, the systems affected the elderly and other vulnerable people disproportionately.

The consumer data sold to fraudsters by the DTC division came from both other fraudulent customers and legitimate Epsilon customers, including nonprofits and nonprofits. DTC staff continued to sell consumer data to fraudulent customers despite knowing that these and similar customers had been arrested, charged with felony, convicted, and otherwise subjected to law enforcement for wrong and misleading practices. Epsilon admitted that the DTC division sold more than 30 million consumer records to fraudulent systems.

“By allowing customers involved in fraudulent systems to purchase data on the millions of consumers most vulnerable to their systems, Epsilon’s staff have facilitated those systems to an amazing effect,” said Brian Boynton, assistant attorney general for the Civil Department of the Ministry of Justice. “We are encouraged by Epsilon’s collaboration since the misconduct discovery, its remediation efforts, and its commitment to tough new compliance measures.”

“Companies that sell consumer information have a responsibility to avoid knowingly selling it to those who use the information to defraud or defraud consumers,” said Colorado District attorney Jason Dunn. “I hope other data companies take note of this finding and make sure they don’t help fraudsters either.”

“Postal inspectors have always viewed consumer protection as a central principle in our efforts to ensure the integrity of the US Postal Service,” said Assistant Chief Inspector Craig Goldberg of the US Postal Inspection Service. “When data companies like Epsilon use their extraordinary access to consumers’ personal information to provide laser-focused marketing lists that support fraudulent practices, more American consumers will be put at risk. Organizations that amass big data take a huge responsibility to ensure that this data is not used by malicious actors. If you deal with criminals exploiting Americans through the U.S. Postal Service, Postal Inspectors are here for you. “

The Data Protection Agency requires Epsilon to select and pay the cost of an independent claims administrator to distribute the $ 127.5 million to identified victims with identified losses caused by fraud programs using Epsilon data. The claims administrator will contact identified victims directly. For more information on the amount of victim compensation and the distribution of funds, please visit the following website: https://www.justice.gov/civil/case/united-states-v-epsilon-data-management-llc. Victims of elderly fraud programs can also contact the National Elder Fraud Hotline, which provides services to seniors who may be victims of financial fraud. The hotline is manned by experienced case managers who personally support callers. The toll-free hotline number is 833-FRAUD-11 (833-372-8311).

The US Postal Inspection Service was investigating the case. Litigation attorneys Alistair Reader and Ehren Reynolds of the Department of Justice’s Civil Department Consumer Protection and US Assistant Attorneys Hetal J. Doshi and Rebecca Weber of the Colorado District Attorney are pursuing the case.

For more information on the consumer protection industry, please visit their website at http://www.justice.gov/civil/consumer-protection-branch. For information about the U.S. Attorney’s Office for the Colorado District, visit the website at https://www.justice.gov/usao-co.

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