One of the nation’s largest check authorization service companies has agreed to pay $3.5 million to settle Federal Trade Commission (FTC) charges that it allegedly violated the Fair Credit Reporting Act (FCRA). Although the company is not a firm providing employment background checks, it did provide services under the FCRA and is subject to many of the same rules that apply to background screening firms. A press release from the FTC concerning the $3.5 million penalty – the second largest in an FCRA matter – is available at http://www.ftc.gov/opa/2013/08/certegy.shtm.
According to the press release, Certegy Check Services, Inc. is a consumer reporting agency (CRA) that compiles personal information of consumers used to help retail merchants in the U.S. determine whether to accept checks of consumers. Under the FCRA, consumers whose checks are denied based on the information provided to merchants by Certegy have the right to dispute that information and have Certegy correct any inaccuracies. The $3.5 million settlement, which requires Certegy to improve its procedures for consumer disputes and accuracy, is available at http://www.ftc.gov/os/caselist/1123184/130815certegyorder.pdf.
The FTC’s complaint alleges that Certegy did not follow proper dispute procedures or reasonably assure maximum possible accuracy of the information it provided to its merchant clients as required by the FCRA. The complaint also alleged the company violated the FCRA by failing to create a streamlined process for consumers to obtain the free annual reports they are entitled to and establish written policies regarding the accuracy of information furnished to other CRAs. The FTC’s complaint against Certegy is available at http://www.ftc.gov/os/caselist/1123184/130815certegycmpt.pdf.
This case is the first FTC action alleging violations of the Furnisher Rule that went into effect on July 1, 2010 and is part of a broader initiative of the FTC to target the practices of data brokers that compile, maintain, and sell sensitive consumer information to companies making important decisions about consumers. The case of United States of America (for the Federal Trade Commission), Plaintiff, v. Certegy Check Services, Inc., Defendant (United States District Court for the District of Columbia) Case No. 1:13-cv-01247 is available at http://www.ftc.gov/os/caselist/1123184/index.shtm.
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