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Consumer bureau seeks sleuths for bad bankers

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The federal government's newly created Consumer Financial Protection Bureau is recruiting investigators in ads that suggest the agency plans to go undercover to pursue cases against banks, credit card companies and other financial companies.

"As needed," one recent recruitment ad stated to potential investigators, "establish and conduct surveillance activity to develop both intelligence and evidence to further investigations. Utilize surveillance activities to identify subjects, their activities and their associates, corroborate source information and collect evidence."

The bureau also said that investigators, who would earn $98,000 to $149,000 per year, may have to arrange for and oversee contracts with private investigators. These private investigators "may know the players, culture, history in a specific geographic area in which a case is centered," according to the advertisements, which outline a host of other responsibilities.

The recruitment effort also makes clear that while working under enforcement lawyers, investigators would be assigned to "delicate matters, issues and investigative problems for which there are few, if any, established criteria."

Officials at the bureau declined to discuss specific investigative techniques, but said the practices would not engage in any sort of activities that violate the civil liberties of subjects.

"Investigative work conducted by our staff will be covered by Consumer Financial Protection Bureau policies to ensure all practices comply with applicable laws and regulations and protect individuals' privacy rights," said bureau spokeswoman Moira Vahey.

"The investigation activities described in the posting are intended to inform our enforcement office about what consumers may experience with different financial products or services," Ms. Vahey said. "We anticipate that the type of information gathered generally will be information available to the general public. Investigation activities like these are typical among agencies charged with civil law enforcement."

In that respect, the planned activities may not be unlike those at the Department of Education, which has dispatched undercover contractors posing as would-be students to colleges to survey their financial-aid experiences and get leads on suspected fraud.

A similar plan at the Department of Health and Human Services was scrapped last year after some members of Congress complained that it amounted to spying. Health officials wanted to send "mystery shoppers" into doctors' offices to gauge Medicaid and Medicare patients' access to primary care physicians.

Meanwhile, the Federal Trade Commission (FTC) last year signed off on a contract for more than $100,000 in hiring a mystery-shopper company. The commission declined to discuss the deal when it was first reported by The Washington Times this year, but the FTC has publicly discussed an undercover operation it oversaw in which children ages 13 to 16 were recruited to go into retailers, unaccompanied by adults, to try to buy R-rated movies and DVDs, and video games rated "M" for mature.

The American Civil Liberties Union (ACLU), which has criticized many federal government surveillance activities, declined to comment on the consumer bureau's recruitment ad.

Robert Ellis Smith, publisher of the Privacy Journal, said federal agencies are often "tone-deaf" when it comes to publishing information in rules, regulations and advertisements. Although he called the wording of the ad "unfortunate" — particularly the reference to developing intelligence — Mr. Smith said he didn't think activities would raise any serious privacy concerns if the agency is having undercover investigators apply for mortgages or credit cards.

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