• by Wendy Davis  @wendyndavis, May 23, 2011

A Virginia resident may move forward with a lawsuit against online data broker Spokeo for allegedly violating federal fair credit reporting laws, a judge has ruled. U.S. District Court Judge Otis D. Wright II in the Central District of California ruled that allegations by Thomas Robins about Spokeo's "inaccurate consumer reporting information" warranted further proceedings.

Wright previously dismissed Robins' lawsuit on the grounds that he didn't assert he suffered any economic injury as a result of the information Spokeo makes available. That dismissal was without prejudice, meaning that Robins could file an amended complaint.

Robins responded by filing new court papers spelling out why he believed he was harmed. Specifically, he alleged that inaccurate information on the site had cost him money by hampering his job search. "Robins has been actively seeking employment throughout the time that Spokeo has displayed inaccurate consumer reporting information about him and he has yet to find employment," he asserted.

His lawsuit is one of several recent actions against Spokeo. The company runs a search engine that allows Web users to search for detailed reports about individuals by name, email address, screen name or phone number. Spokeo gathers information from a variety of databases, including social-networking sites. It offers some basic data for free, but also sells a variety of information, including estimates of individuals' financial wealth.

Robins says that Spokeo correctly lists neighborhood and siblings' names, but inaccurately reports other data -- including his age, marital status and field of employment.

Critics like the digital rights group Center for Democracy & Technology argue that the site compromises people's privacy, but the legal allegations center on whether Spokeo violates the federal Fair Credit Reporting Act by offering inaccurate data about consumers without effectively allowing people to correct the reports. p> In addition to Robins, Illinois resident Jennifer Purcell also filed a potential class-action lawsuit against the site. The Center for Democracy & Technology also filed a complaint about Spokeo with the Federal Trade Commission.

Spokeo takes the position that it is not subject to the Fair Credit Reporting Act because it isn't a consumer reporting agency. The company also argues that it is immune from liability under the Federal Communications Decency Act, which generally provides that Web sites aren't responsible for content created by third parties.

Wright said in his ruling that it would be premature to dismiss the lawsuit for either of those reasons at this time.