Data Brokers Targeted by a New Type of Class Action Lawsuit

​In a newly emerging trend, plaintiffs' attorneys have filed a series of putative class action lawsuits under the Colorado Prevention of Telemarketing Fraud Act (PFTA) targeting data companies that maintain cellular telephone numbers in commercial directories.

These companies do not engage in telemarketing themselves. Instead, the legal strategy behind these lawsuits centers on a previously untested provision of the PFTA that prohibits knowingly listing "a cellular telephone number in a directory for a commercial purpose unless the person whose number has been listed has given affirmative consent."

Although the PFTA has been in effect since 2005, there is virtually no case law interpreting its provisions, creating both opportunity for plaintiffs’ attorneys and uncertainty for the data companies they have targeted.

The PFTA and Similar Statutes

The PTFA, codified at Colo. Rev. Stat. Ann. § 6-1-304(4) goes beyond traditional robocall and other telemarketing restrictions. The act's cellular phone directory provision specifically states that it is unlawful to knowingly list a cellular telephone number in a directory for commercial purposes without the phone number holder's affirmative consent.

The statute also provides for substantial statutory damages of $300 to $500 per violation for first offenses and $500 to $1,000 for second or subsequent offenses, along with attorneys' fees and costs. Like other consumer protection statutes with statutory damages, the PFTA is particularly attractive to plaintiffs' attorneys, as it allows for meaningful recovery even in cases where actual damages may be minimal.

It is therefore not surprising that plaintiffs’ attorneys are putting the PFTA to the test. The only mystery here why it took them so long to get around to cashing in on what is now a multi-billion-dollar industry.

And Colorado's PTFA is not an isolated statute. Several other states have enacted similar laws protecting cellular phone numbers from unauthorized directory listings, including Connecticut, New York, Pennsylvania, and Texas. It is therefore reasonable to conclude that successful litigation under the PTFA will serve as a template for similar cases in other jurisdictions.

Targeted Companies

The online personal information directory business, often comprising “people search” services, data brokers, and directory publishing, is a significant and multi-faceted industry that was valued at $270.4 billion in 2024. It includes platforms that aggregate, publish, and monetize expansive data on individuals, such as contact information, addresses, social media profiles, background checks, and more.

The recent wave of PTFA litigation has targeted several prominent companies in the space, each operating distinct business models that involve the collection and display of cellular phone numbers:

Datanyze, LLC: A business search platform provider that operates a digital database for sales, marketing, and recruiting professionals. The company's database contains over 120 million profiles and is accessible through its website or a Google Chrome extension that works with LinkedIn.

Zenleads, Inc.: A data and lead generation company that has been involved in ongoing litigation with competitors like ZoomInfo Technologies, indicating the competitive nature of the B2B data market.

Infopay, Inc.: A data company that appears to specialize in providing access to consumer and business contact information.

Lusha Systems, Inc.: A B2B database and contact information provider that offers a platform with over 150 million business profiles, providing direct phone numbers and mobile contacts for decision-makers.

Beenverified, LLC: A background check and people search service that has been the subject of class action litigation under Colorado's PTFA, with cases filed alleging violations of the statute's directory listing provisions.

Several prominent plaintiffs' law firms have jumped on the PTFA bandwagon in recent months, indicating coordinated efforts to exploit this previously untested legal theory. The complaints specifically target business models where companies display "teaser" data in response to search queries, offering to sell additional information to users.

Plaintiffs argue that displaying cellular phone numbers in response to such searches constitutes "listing" numbers in a "directory" within the meaning of the PTFA. This approach challenges the fundamental business model of many data companies, which rely on providing limited information to attract customers while offering more detailed data through paid subscriptions. The legal theory suggests that even displaying partial information about cellular phone numbers could trigger PTFA liability.

Potential Exposure and Settlements

The statutory damages structure of the PTFA makes these cases particularly attractive for class action treatment. With damages of $300 to $500 per violation for first offenses, a class of even moderate size could generate significant potential liability. For companies with large databases containing millions of phone numbers, the potential exposure could be substantial.

Data companies facing PTFA litigation are likely pursue several defense strategies, meaning the ultimate success of these efforts is at this point uncertain. However, the availability of attorneys' fees under the PTFA adds additional pressure for defendants to settle, as litigating a case for years to an adverse judgment can result in crippling attorneys’ fee awards; a disturbing pattern similarly seen in TCPA litigation.

Indeed, while PTFA litigation is relatively new, there are already indications of early settlement activity. It appears as though a settlement has been reached in at least one case, though specific terms have not been disclosed. Of course, as with other types of consumer class actions, coercing hefty settlements from deep-pocketed defendants is the entire point.

Another Massive Litigation Wave?

While PTFA litigation is likely to prove lucrative for the Plaintiff’s bar, it is unlikely to generate a massive tidal wave of lawsuits to rival the TCPA. For one thing, data companies are certain to adapt their practices in response to the PTFA litigation that has been filed so far. For example, PFTA litigation targets are likely to implement more robust consent processes for cellular phone number collection, and reducing the amount of phone number information displayed in search results will further help minimize exposure.

More importantly, while the online personal information directory business may be robust and highly profitable, there simply aren’t that many companies participating in it. In other words, there aren’t nearly as many potential PTFA defendants as there are TCPA defendants.

Final Takeaway on PFTA

The series of putative class action lawsuits targeting data companies under Colorado's Prevention of Telemarketing Fraud Act represents a new front in the battle over commercial use of personal information.

The litigation challenges fundamental business models in the data broker industry while raising important questions about the scope of consent required for commercial use of cellular phone numbers. With cases pending in federal courts across the country and experienced plaintiffs' firms coordinating their efforts, the PTFA litigation could have far-reaching implications for how data companies collect, use, and display personal information.

While the eventual outcome of individual cases is uncertain, this type of litigation will be closely watched by privacy advocates, data companies, and legal practitioners as it may herald a new era of privacy enforcement targeting the foundational practices of the digital economy.