FTC Settles with Retailer Over Alleged FCRA Violations Related to Identity Theft

Written By ESR News Blog Editor Thomas Ahearn

On June 10, 2020, the Federal Trade Commission (FTC) announced that a department store retail chain agreed to pay a civil penalty of $220,000 to settle allegations that the retailer violated the Fair Credit Reporting Act (FCRA) “by refusing to provide complete records of transactions to consumers whose personal information was used by identity thieves,” according to a press release from the FTC.

In a complaint filed by the Department of Justice (DOJ) on behalf of the FTC, the Commission claimed that Kohl’s Department Stores, Inc. refused to provide information identifying the thieves to identity theft victims, despite the fact that the FCRA guarantees victims access to this information. The FTC also alleged that the company failed to provide the information within 30 days, as required by the FCRA.

“If someone stole your identity, it’s your right to get the records related to the theft – and that’s a right the FTC takes seriously,” Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, stated in the press release from the FTC. “This case is a warning to other companies: We will hold you responsible if you fail to give identity theft victims the required business records.”

This is the first case the FTC has brought using its authority under Section 609(e) of the FCRA, which Congress added to the statute to require companies to provide victims of identity theft with application and business transaction records about fraudulent transactions made in their names within 30 days. More information about Section 609(e) of the FCRA is at www.consumer.ftc.gov/articles/pdf-0090-fcra-609e.pdf.

In addition to the $220,000 civil penalty, Kohl’s is required to provide identity theft victims with access to business transaction records related to the theft within 30 days. The company also must post a notice on its website informing identity theft victims about how to obtain records related to identify theft, and certify that it has reached out to victims who were unlawfully denied access to such records in the past.

Enacted by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRAs), protects consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports, and regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider founded in the San Francisco, California area in 1997 – offers FCRA-compliant background screening solutions and white papers on how employers may avoid FCRA lawsuits and how CRAs may avoid FCRA lawsuits. To learn more about background check services from ESR, visit www.esrcheck.com.

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