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October 26, 2007
WSJ: Data broker ChoicePoint exploited AARP as "fear factor" to evade do-not-call list, scam elderly
Today's Wall Street Journal has a front page expose on the business of "lead cards" called Marketers Use Trickery To Evade No-Call Lists (pd. subs. req'd). The story by Jennifer Levitz and Kelley Greene explains that "Older Americans around the country are getting duped by a seemingly innocuous tactic that can expose them to hard-sell pitches from the insurance industry." Read the story and you won't be surprised to find that right in the middle of it are the data brokers, led by ChoicePoint (you remember ChoicePoint, the ones who sold consumer dossiers to identity thieves and paid a $15 million fine including victim restitution to the FTC). Well, according to information obtained during a successful lawsuit by AARP to defend its name: In internal emails, ChoicePoint employees attributed the cards' success in generating responses to their "fear factor" and described response rates that "tumbled" when AARP's name was temporarily removed from mailings. More:
In April 2006 it [AARP] won a permanent injunction in U.S. District Court in Jacksonville, Fla., prohibiting a company owned by ChoicePoint Inc., a big Alpharetta, Ga., seller of personal data, from referring to AARP on its lead cards and from using a Washington, D.C., return address unless it had an office there. In a settlement, ChoicePoint also agreed to destroy lead cards violating the injunction and paid an undisclosed sum to AARP. The story says ChoicePoint's response is that it had acquired a company that was already using deceptive practices, but the story also goes on to say that ChoicePoint didn't stop using the profitable tactics until after AARP beat it in court.
When the virtually unregulated data brokers lobby Congress for exceptions from privacy laws, they argue that they deserve the right to use non-public personal information like Social Security Numbers because their practices are allegedly in the public's interest. They point to their relatively minor efforts to find lost children or missing heirs, track potential terrorists and expose miscreant "deadbeat dads." Funny, I haven't seen the legislative fact sheet that explains the public benefits of misusing AARP's name to trick seniors into dropping off the federal Do Not Call list so that they can be scammed out of their life savings. Here's some older material of ours explaining the data brokers' unregulated "parallel universe."
The story also explains that many state attorneys generals, including Illinois AG Lisa Madigan, are attacking the deceptive use of "lead cards" to trick consumers, especially seniors, into dropping off the federal Do not call list designed to protect their privacy: The technique is centered on a marketing tool called the lead card, and it became popular after the federal government created its Do Not Call Registry in 2003 to shield consumers from unwanted solicitors. Sent through the mail, the lead card invites the recipient to mail off an enclosed reply for free information about, say, estate planning. But the cards fail to warn that by sending off replies, recipients are giving up their right to avoid telephone solicitations from the sender -- even if their phone numbers are on the Do Not Call list. "It's a huge loophole," says Pam Dixon, executive director of the World Privacy Forum... We'll be looking into this further and seeing whether there is a legislative fix. Last week, the FTC announced it would not require consumers to re-apply for the federal Do-Not-Call registry after their first 5 years is up, as the original 2003 rule had called for.
Posted by Ed Mierzwinski at October 26, 2007 06:33 AM
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