Thursday, 4 Mar 2021

Massive marketing company to pay $150 million for facilitating elder fraud scheme, state U.S. DA said – The Denver Post

One of the largest marketing companies in the world has agreed to pay $150 million for facilitating elder fraud schemes, according to a Wednesday news release from Colorado’s U.S. District Attorney Jason Dunn.

Epsilon Data Management LLC has entered into a settlement with the Department of Justice and the U.S. Attorney’s Office for the District of Colorado in connection with criminal information charging the company with one count of conspiracy to commit mail and wire fraud, the release read.

Epsilon Data Management did not immediately respond to a request for comment.

About $127 million of the total Epsilon is paying will go toward compensating victims of the fraudulent schemes that used consumer data sold by Epsilon. The marketing company has also agreed to “significant compliance measures” to safeguard consumer data and prevent its sale to people engaged in fraudulent or deceptive marketing. Epsilon is also now required to maintain a procedure in which consumers may request their information not be sold to others.

Epsilon is headquartered in Irving, Texas but its principal sales office is located in Westminster.

Epsilon admitted that from July 2008 through July 2017, its employees knowingly sold lists of customers — more than 30 million consumers’ data — to clients engaged in fraud. Epsilon acknowledged selling to a number of mass-mailing fraud schemes that sent fake sweepstakes and astrology solicitations to consumers, stating that each consumer — largely targeting the elderly and other vulnerable individuals — had won a large prize or individualized psychic service they could obtain by paying a fee.

Victims who paid a fee received nothing of value, the news release read.

Epsilon employees continued to sell the data to clients engaged in fraud despite knowing those and similar clients had been arrested, charged with crimes, convicted and otherwise subject to law enforcement actions for false and misleading practices, the news release read.

“Companies who sell consumer information have a responsibility to avoid knowingly selling it to those who will use the data to defraud or swindle consumers,” Dunn wrote in the news release.  “I hope other data companies will take note of this outcome and ensure that they don’t likewise help fraudsters.”

Epsilon must now select and cover the costs of an independent claims administrator to distribute the $127.5 million to identified victims with established losses caused by fraud schemes using Epsilon data. The victims will be contacted directly.

More information about the victim compensation amount and fund distribution will be posted at justice.gov/civil/case/united-states-v-epsilon-data-management-llc. Victims of elder fraud schemes can also contact the National Elder Fraud Hotline at 833-372-8311.

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