Spokeo Responds To CDT’s Complaint

For those of you who may not have heard, The Center for Democracy and Technology (CDT) – a non-profit public interest group that, interestingly, bills itself as “working to keep the Internet open, innovative, and free”– filed a complaint with the Federal Trade Commission (FTC) last week, alleging that Spokeo’s practices violate the Fair Credit Reporting Act, and Section 5 of the Federal Trade Commission Act.

In its complaint CDT made some rather startling allegations that confounded both mainstream users and techies alike. In fact, most of us were simply left scratching our heads in bewilderment, exclaiming “Huh? Are these guys for real? How do they even come up with this stuff?”

Now, we should say that we believe wholeheartedly in a healthy exchange of ideas. In fact, we applaud advocacy and recognize that watchdogs play an important role in society. They are a necessary component that helps keep everyone in check. But, a healthy system of checks and balances is a bit different from a misleading and unjustified complaint filed with federal regulators that, for all intents and purposes, threatens to suck the life out of entrepreneurship, innovation, and free enterprise, wouldn’t you agree?

We understand that CDT is interested in protecting privacy.  And that’s not a bad thing.  In fact, we’re all for it. So long as it’s in sync with the twenty-first century. Still, we think that even when you have a cause that’s near and dear to your heart, it is important to dot your “i”s and cross your “t”s  before you go making damaging allegations – especially ones that we know to be untrue.

CDT’s complaint is, to put it mildly, royally off mark. To clarify just how off mark, let’s take a look at the basis of its claim: In its complaint CDT asserts that Spokeo violates the Fair Credit Reporting Act because Spokeo offers detailed “consumer profiles” and then encourages employers to use these profiles to evaluate potential hires. Further, they allege, Spokeo violates Section 5 of the Federal Trade Commission Act, because Spokeo guarantees credit and wealth assessments for “all” individuals – in particular, “information about the consumer’s mortgage, income, and investments” —  just for purposes of luring consumers to sign up for paid services, but then “never” delivers “any” of that information.

Spokeo offers detailed consumer profiles? That’s interesting. It sure comes as news to us. Last we checked, we were a search engine, not a credit bureau. OK, so let’s stop pussyfooting around and look at what’s really going on here. The reality is, CDT knows that to regulate Spokeo the way they would like to – in other words, to put us out of business — they must first meet certain threshold criteria that would make Spokeo subject to the Fair Credit Reporting Act.  First on that list is, they must establish that Spokeo generates consumer reports. Then they must show that Spokeo encourages employers to rely on those reports for hiring decisions. 

The problem they face meeting that threshold is twofold:  First, Spokeo simply does not generate consumer reports. Try as they may to repackage the data Spokeo aggregates, and re-characterize it as “consumer reports,” CDT simply cannot. Calling an orange a grapefruit still does not make it so, no matter how hard you try to make it look like one.

Spokeo does not aggregate any secure or private information such as Social-Security numbers, driver’s license numbers, bank accounts, or credit scores. Moreover, we do not draw conclusions about the public records we do aggregate. Any wealth indices displayed on our site are already published and obtainable. These are merely widespread marketing summaries of the ilk that advertisers have been relying upon for decades. Spokeo was and remains a search engine. Much like Google we simply aggregate already published, public records, many of which have been in existence for a very long time.

Second, Spokeo does not encourage employers to rely on any of the data we aggregate for any purpose, much less for purposes of making employment decisions.  Here, again, CDT’s complaint is baseless, and frankly, reckless.

A little history: Since our inception, there have been several iterations of the Spokeo product.  Spokeo 3 was strictly a social-network people-search product.  It performed people search across numerous social networks, and offered users a way to keep up with friends and contacts across those networks more efficiently. That version of the product included no additional, external published sources. Hence, if a human resources professional who was already using social networks like MySpace or Facebook to research an employee simply wanted to do so more quickly, Spokeo’s search engine simply provided them with a more efficient and perfectly legitimate mechanism by which to do so.

Since the introduction of Spokeo 4 in March 2010, which added other published-data sources and functions, to avoid the possibility of any misuse or confusion, Spokeo expressly ceased to promote its new product for any human resource purposes. At present, we in no way endorse or encourage such uses, nor do we plan to do so in the future.  Further, Spokeo repeatedly states across the site that any information it aggregates is only as accurate as the published information it is derived from, that the information cannot be guaranteed for accuracy, and should therefore only be used as a reference. Perhaps if CDT had bothered to research things more carefully before launching into its tirade, it would have realized that there were two distinct products with separate life cycles, and both Spokeo and taxpayers could have been spared the unnecessary cost of a frivolous complaint.

With regards to CDT’s second claim that Spokeo violates Section 5 of the Federal Trade Commission Act because it guarantees credit and wealth assessments for “all” individuals, specifically “information about the consumer’s mortgage, income, and investments,” all just for purposes of luring consumers to sign up for paid services, and then “never” delivers “any” of that information — the claim is not only baseless, but frankly borders on the defamatory and libelous.  Again guys, how ‘bout next time before you go making such outlandish allegations you try some due diligence first?

Before anyone purchases any service Spokeo offers, Spokeo states in no uncertain terms that the information available “may” include…and then goes on to provide a full list of what the search may offer.  Spokeo never promises to provide all of the information in every search. It cannot because information is not static. It varies from person to person. People are different, and not every person has the same types or quantities of data published about them.

As for specific “information about mortgage, income, and investments” – those fields are offered as part of the business premium product only. Hence, a free search will not yield this information. Again, maybe if CDT had bothered to explore Spokeo’s product line more thoroughly, it would have noted this distinction. Once more, however, for the reason indicated above, even within the business premium package Spokeo can never guarantee that all of this information will come through in every search. Information will always vary among searches due to the varying availability of published records on any given individual.

It is noteworthy that as of the date of this writing, however, 89.8% of searches on the business premium product have yielded “estimated income.” Economic Health measures, offered as part of the regular premium product, yielded results in 65% of the searches, and Wealth Level fields yielded information in 69% of searches.  Given these statistics, how CDT arrived at “never” sure beats us.

More glaringly, CDT never bothers to mention that our paid products offer not only the potential for yielding more data, but provide extra search avenues as well. Under the premium product one can perform reverse e-mail search, phone search, and even upload a contact address book and follow friends across social networks. How CDT could ignore all of that and flagrantly claim that you get nothing for your money is beyond us. 

Fortunately, as evidenced by the millions of searches performed on Spokeo every month, it seems most users clearly disagree with CDT’s claims, and value our products and service.  We thank all of our users for their continued support and remain committed to improving upon, and developing even greater products in the future.