PhotoA medical lab, LabMD, exposed the personal information of about 10,000 consumers by failing to take adequate security measures, the Federal Trade Commission charges.

The complaint alleges that LabMD billing information for over 9,000 consumers was found on a peer-to-peer (P2P) file-sharing network and then, in 2012, LabMD documents containing sensitive personal information of at least 500 consumers were found in the hands of identity thieves.

In a statement, LabMD did not deny the allegations but challenged the FTC's authority to bring the action.

“The Federal Trade Commission’s enforcement action against LabMD based, in part, on the alleged actions of Internet trolls, is yet another example of the FTC’s pattern of abusing its authority to engage in an ongoing witch hunt against private businesses," the statement said. "LabMD looks forward to vigorously fighting against the FTC’s overreach by seeking recourse through the available legal processes.”

Identity theft

The complaint alleges that a LabMD spreadsheet containing insurance billing information was found on a P2P network.  The spreadsheet contained sensitive personal information for more than 9,000 consumers, including names, Social Security numbers, dates of birth, health insurance provider information, and standardized medical treatment codes.  

Misuse of such information can lead to identity theft and medical identity theft, and can also harm consumers by revealing private medical information. 

Once a file has been made available on a P2P network and downloaded by another user, it can be shared by that user across the network even if the original source of the file is no longer connected.    

The complaint also alleges that in 2012 the Sacramento, California Police Department found LabMD documents in the possession of identity thieves.  These documents contained personal information, including names, Social Security numbers, and in some instances, bank account information, of at least 500 consumers. 

The complaint alleges that a number of these Social Security numbers are being or have been used by more than one person with different names, which may be an indicator of identity theft. 

“The unauthorized exposure of consumers’ personal data puts them at risk,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “The FTC is committed to ensuring that firms who collect that data use reasonable and appropriate security measures to prevent it from falling into the hands of identity thieves and other unauthorized users.”

The FTC said the case is part of an ongoing effort to crack down on companies that fail to protect consumers’ personal data. 

LabMD conducts laboratory tests on samples that physicians obtain from consumers and then provide to the company for testing.  The company, which is based in Atlanta, performs medical testing for consumers around the country. 

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