The Federal Trade Commission announced today that Certegy Check Services, Inc. has agreed to pay a $3.5 million fine to settle charges that it violated the Fair Credit Reporting Act (FCRA), 15 USC 1681 et seq. This is the FTC’s second highest fine in an FCRA matter, falling behind ChoicePoint, Inc., which paid a $10 million fine in an FCRA case filed by the FTC in 2006.
The FTC alleged that Certegy, which provides check authorization services to thousands of merchants, is a consumer reporting agency or CRA under Section 603(f) of the FCRA. As such, Certify is alleged to have violated a number of obligations under the FCRA, such as failing to:
- Use reasonable procedures to assure maximum possible accuracy of consumer report information in violation of Section 607(b) of the FCRA;
- Comply with Section 611 of the FCRA by seeking to “shift the burden of conducting a reinvestigation to consumers rather than fulfilling its legal obligation to reinvestigate disputed information”;
- Create a streamlined process for consumers to obtain free annual reports, as required by Section 612(a)(l)(C)(i) of the FCRA and its implementing regulation, 12 CFR 1022, subpart N; and
- Establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information it furnishes to other CRAs, as required by the Furnisher Rule, 12 CFR 1022, subpart E.
This case adds to the FTC’s activity in the FCRA front this year, which includes a settlement with a marketer of criminal background screening reports and a series of warning letters to businesses for conduct that may violate the FCRA, including letters sent in May to ten data brokers.