Javascript is not enabled.

Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.

Skip to content
Content starts here
CLOSE ×

Search

Leaving AARP.org Website

You are now leaving AARP.org and going to a website that is not operated by AARP. A different privacy policy and terms of service will apply.

Big Data Firm Helped Fraudsters Pull Off Sweepstakes, Astrology Scams

Epsilon must pay $127.5 million to victims, many older Americans, who lost money

spinner image Epsilon logo outdoors
Kristoffer Tripplaar / Alamy Stock Photo

Marketing giant Epsilon Data Management has been charged criminally and agreed to pay $150 million for helping facilitate elder fraud schemes involving phony sweepstakes and psychic services, the Department of Justice (DOJ) said Wednesday.

The firm admitted it sold the data of more than 30 million consumers to those behind fraudulent or deceptive schemes from 2008 to 2017, DOJ said. Some of that consumer data came from legitimate clients, including nonprofits and charities, and some came from clients who were fraudsters.

spinner image Image Alt Attribute

AARP Membership— $12 for your first year when you sign up for Automatic Renewal

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

The schemes involved mass mailings to victims who paid a fee but in return “received nothing of value,” the DOJ said.

Data sales amid arrests and charges

Epsilon employees “continued to sell consumer data to clients engaged in fraud despite knowing that those and similar clients had been arrested, charged with crimes, convicted and otherwise subject to law enforcement actions for false and misleading practices,” DOJ said.

Epsilon, in Irving, Texas, was charged in federal court with conspiracy to commit mail fraud and wire fraud. However, prosecution was deferred under a settlement with DOJ.

Victims with losses to be compensated

Epsilon must designate $127.5 million of $150 million to compensate identified victims with losses caused by fraud schemes that used the consumer data at issue, the department said. A claims administrator will contact identified victims directly, it said. Here's more information about the compensation.

"Firms that amass big data assume a big responsibility to ensure this data is not used by malicious actors.”

—Craig Goldberg, U.S. deputy chief postal inspector

The law enforcement arm of the postal service, the U.S. Postal Inspection Service, probed the case. In a statement, Deputy Chief Postal Inspector Craig Goldberg said: “When data firms such as Epsilon use their extraordinary access to consumers’ personal information to provide laser-focused marketing lists supporting deceptive practices, more American consumers are placed in harm's way. Firms that amass big data assume a big responsibility to ensure this data is not used by malicious actors.”

Consumers can stop sale of their data

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.

Epsilon is one of the world's largest marketing companies, the DOJ said in its news release. Under the agreement, the firm agreed to take steps to safeguard consumer data and prevent its sale to fraudulent or deceptive marketing campaigns. It also must allow consumers to request that it not sell their information.

Publicis Groupe S.A., which owns the firm, noted Wednesday that it completed its purchase of Epsilon in 2019 after the events described occurred. The previous owner has indemnified Publicis for all costs including the penalties and victim compensation, it said. The previous owner was Alliance Data Systems.

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.

Discover AARP Members Only Access

Join AARP to Continue

Already a Member?

spinner image membership-card-w-shadow-192x134

Join AARP today for $16 per year. Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP The Magazine.