Epsilon Data Management and KBM Group has agreed to pay $161 million to resolve fraud charges with the federal government.
What is The Epilson Data Management & KBM Group Fraud
KBM Group and Epsilon acknowledged that they sold consumer lists to a number of mass-mailing fraud schemes that sent false “sweepstakes” and “astrology” solicitations to consumers. Those solicitations stated that each consumer recipient had won a large prize or individualized psychic service that they could obtain by paying a fee. In reality, the solicitations — as known to KBM Group and Epsilon employees — were mass-produced mailings and victims who paid a fee received nothing of value. As reflected in the consumer lists sold by KBM Group and Epsilon to perpetrators of the fraud schemes, the schemes disproportionately affected the elderly and other vulnerable individuals.
What is the Lawsuit All about
KBM Group, LLC (“KBM”) was charged by information with conspiracy to commit mail and wire fraud. The information alleges that from approximately January 2012 through December 2018, employees in KBM’s Merchant Services unit sold data associated with millions of American consumers to clients engaged in fraudulent mass-mailing schemes. KBM accepted a Deferred Prosecution Agreement (“DPA”) requiring that it pay $33.5 million to a victim compensation fund and an $8.5 million criminal fine. On June 29, 2021, Chief Judge Philip A. Brimmer granted the parties’ Joint Motion for Deferral of Prosecution. The Court’s order defers all proceedings in this case for 30 months while KBM completes its obligations under the DPA. The DPA requires the appointment of a Claim Administrator to manage distributions from the victim compensation fund.
The U.S. Department of Justice sent notices with payment estimates to consumers affected by fraud. Individuals who believe they are eligible but did not receive a notice can file a fraud report with the federal government.
Under the terms of the DPAs, consumers can receive a cash payment for fraud experienced as a result of their information being shared. Payment amounts have been calculated by the Department of Justice but will vary depending on each customer’s situation. Eligible individuals should have received a mailed notice with a payment estimate. There is no process in place to appeal for higher payments.
How to know if you are in the settlement class
Under the terms of the DPAs, consumers can receive a cash payment for fraud experienced as a result of their information being shared. Payment amounts have been calculated by the Department of Justice but will vary depending on each customer’s situation. Eligible individuals should have received a mailed notice with a payment estimate. There is no process in place to appeal for higher payments. The two deferred prosecution agreements (DPAs) benefit victims of fraudulent mass mailing schemes as a result of shared information from Epsilon Data Management and/or KBM Group.
Conclusion
The DPAs do not note any injunctive relief, but consumers have the ability to contact Epsilon Data Management and/or KBM Group to request their information be removed from any lists.
The deadline to change contact information and addresses with the settlement administrator is May 4, 2022.
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