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A buyer of Certegy's records is facing a fraud inquiry.
By SCOTT BARANCIK, Times Staff Writer
Published December 14, 2007
Since disclosing in July that an employee stole financial records of 8.4-million Americans, Certegy Check Services has preached calm.
The St. Petersburg company, which provides check-authorization services to retailers, says there is no sign the stolen records have been misused by the direct-marketing companies that later bought them. At worst, Certegy says, some affected consumers might have gotten a little more junk mail than usual, or maybe a few extra telemarketing calls.
But for some, the impact may have been less benign. Strategia Marketing, a Largo company raided in July as part of a federal investigation into telemarketing fraud, bought hundreds of thousands of Certegy's stolen records of individuals this year and made sales calls to them.
Invoices subpoenaed by the Florida Attorney General's Office show Strategia bought more than 660,000 Certegy records from a Seminole data broker between March and June for about 40 cents apiece. Los Angeles lawyer Gary Caris, whose firm represents the court-appointed receiver that took control of Strategia in July, says internal e-mails indicate the company bought a total of 1.2-million stolen records. Both Certegy and Strategia declined to comment Thursday on the purchases.
A Federal Trade Commission lawsuit shows what may be at stake for affected consumers. Filed in Tampa federal court in July, the suit portrays Strategia as a classic boiler room setup.
Strategia telemarketers would contact consumers with a compelling offer. One program called "Variety!" promised $400 in airline vouchers and $100 in free gas coupons in exchange for accepting a 14-day free trial in a discount-shopping club. After tricking the consumers into providing their bank account numbers, the company would make unauthorized debits.
The FTC says the company's free gifts were largely worthless, and consumers apparently agreed. According to the receiver, 44.3 percent of those billed from June 2006 through July 2007 persuaded their bank to cancel the charge, while 9.5 percent got a refund from Strategia. Industry leaders consider even a 2 percent rejection rate to be substandard. Strategia's court filings deny any wrongdoing.
Working out of a well-appointed, 47,000-square-foot headquarters near the junction of Ulmerton and Starkey roads, Strategia's 700-plus employees had gross sales of $118-million from June 2006 to July 2007, or roughly $150,000 per full-time worker. The company has been forcibly idled since July.
Certegy has an incentive to downplay this wrinkle. Class-action attorneys have filed six lawsuits against the company on behalf of affected consumers, and to obtain damages the lawyers will have to prove actual harm. Moreover, Certegy's parent company, Jacksonville-based Fidelity National Information Services, is hoping to sell the unit.
Ex-Certegy employee William G. Sullivan pleaded guilty last month to stealing the data and selling it for $580,000. Certegy promoted him to the position of senior database administrator in January, at a salary of $90,000.
Times staff researcher Caryn Baird and staff writer Lorri Helfand contributed to this report. Scott Barancik can be reached at firstname.lastname@example.org or (727) 893-8751.
Long legal road lies ahead
The background: Certegy Check Services of St. Petersburg said in July that an employee had stolen and sold financial records on 8.4-million Americans but that there was no evidence of misuse. William G. Sullivan of Largo pleaded guilty to the theft last month.
The latest: Strategia Marketing, a Largo company raided in July as part of a telemarketing fraud investigation, bought 660,000 of the stolen records this year to pitch products to people on the lists.
What's ahead: Florida's attorney general is investigating the theft and resale of Certegy's consumer data. A criminal investigation by the U.S. attorney in Tampa also is continuing.
[Last modified December 14, 2007, 01:44:01]