A Bounty Hunter Tracked a Phone for $300. Now Comes the Lawsuit

(Bloomberg) -- First came the story. Then a letter from 15 U.S. senators demanding a government investigation of the sale of location data by the wireless industry.

And, of course, there is a lawsuit.

On Jan. 8, the technology site Motherboard published an article saying telecommunications companies including AT&T Inc., Sprint Corp. and T-Mobile US Inc. were selling access to their customers’ data to “location aggregators” and that the information, meant for roadside assistance services and the like, was ending up on the black market.

The story said MicroBilt Corp., a credit data and risk management company, was buying information from an aggregator and then “selling phone geolocation services with little oversight to a spread of different private industries, ranging from car salesmen and property managers to bail bondsmen and bounty hunters.” It said MicroBilt’s Mobile Device Verification product can take a phone number and “return a target’s full name and address, geolocate a phone in an individual instance, or operate as a continuous tracking service.”

The headline was “I Gave a Bounty Hunter $300. Then He Located Our Phone.”

Privacy Spotlight

A little more than a week later, MicroBilt sued Bail Integrity Solutions Inc. and its chief executive officer for breach of contract, fraudulent misrepresentation and trade secret theft. It claimed that the Morganton, North Carolina-based, company had gone beyond its agreed use of MicroBilt’s services, such as fraud prevention, and resold geolocation information without getting consumer consent, damaging MicroBilt’s reputation -- although the Motherboard story said the owner of the phone cited in the headline had given consent to be tracked.

MicroBilt also said the Motherboard article included “highly negative and overtly misrepresentative language about MicroBilt.”

Bail Integrity didn’t immediately respond to an email seeking comment on the lawsuit. It wasn’t possible to leave a voicemail because its mailbox was full. Efforts to reach the firm’s CEO were unsuccessful. Motherboard didn’t immediately respond to an email seeking comment on the claim of misrepresentation.

The litigation comes as a variety of technology companies and service providers are in the spotlight over the protection of consumer data. The New York Times published an article last May on another geolocation company and efforts by Senator Ron Wyden of Oregon to protect consumers’ privacy. Privacy concerns loom in the social media industry, where Facebook Inc. was embroiled in a scandal over a massive privacy breach by Cambridge Analytica, the consultancy that worked for President Donald Trump’s 2016 election campaign.

The End?

The telecom service providers cited in the article told Motherboard they don’t tolerate unauthorized use of their customers’ data and act vigorously to stamp out any abuses. After the article came out, several carriers, including AT&T and T-Mobile, said they would stop selling location data to third parties, and are expected to do so over the next couple of months.

In its lawsuit, filed Jan. 17 in federal court in Trenton, New Jersey, MicroBilt said it checks out its users and complies with all applicable laws and regulations. The Kennesaw, Georgia-based company said in the suit that its location data were supposed to be used for lending, leasing, collections and risk management -- for instance, to check that a phone number actually belongs to an applicant who filled out a financial form.

“MicroBilt is committed to protecting consumers and customers from fraud,” Senior Vice President and Chief Marketing Officer Sean Albert said in a statement. “When Bail Integrity Solutions violated the terms of our contract, we immediately cut off its access to the service and prepared this lawsuit seeking damages.”

Angry Senators

Wyden is one of the 15 senators, along with Minority Leader Chuck Schumer of New York and presidential candidates Kamala Harris of California and New York’s Kirsten Gillibrand, who signed the Jan. 24 letter to the chairmen of the Federal Trade Commission and the Federal Communications Commission. They urged the two to “broadly investigate the sale of Americans’ location data by wireless carriers, location aggregators and other third parties.”

The letter’s authors, all Democrats except for Vermont Independent Bernie Sanders, warned that the system exposed the sensitive data to “stalkers, domestic abusers and others,” expressed outrage that the industry had earlier vowed and failed to fix the problem, and asked the agencies “to require the wireless carriers to notify every American whose location they shared or sold.”

In the Motherboard story, Thomas Rid, professor of strategic studies at Johns Hopkins University, noted that the classic 1982 science fiction film “Blade Runner” is set in 2019.

“And here we are,” Rid said. “There’s an unregulated black market where bounty hunters can buy information about where we are, in real time, over time, and come after us. You don’t need to be a replicant to be scared of the consequences.”

The case is MicroBilt Corp. v. Bail Integrity Solutions Inc., U.S. District Court, District of New Jersey (Trenton).

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Peter Jeffrey, David Glovin

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