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From Banking and Finance Law Daily, August 15, 2013

FTC brings first action under FCRA Furnisher Rule

By John M. Pachkowski, J.D.

The Federal Trade Commission has entered into an agreement with Certegy Check Services, Inc., to settle charges that Certegy violated the FTC’s Furnisher Rule.

Certegy, one of the nation’s largest check authorization service companies, will pay $3.5 million to settle the charges. According to an FTC blog posting, the monetary penalty is the “second-largest civil penalty ever in an FCRA case.”

In its complaint, the FTC alleged, among other things, that Certegy did not follow proper dispute procedures. The complaint further alleged that Certegy failed to follow reasonable procedures to assure maximum possible accuracy of the information it provided to its merchant clients, as required by the FCRA.

To correct the alleged violations, Certegy has also agreed to bring its business practices in compliance with the Fair Credit Reporting Act and the Furnisher Rule. For example, Certegy will no longer be able to require consumers to contact a third party if it can get sufficient information on its own. In addition, Certegy must complete reinvestigations within 30 days or 45 days if consumers give them additional information in the interim. Finally, Certegy will be required to implement written procedures to promote the accuracy and integrity of the information given to other consumer reporting agencies.

Commenting on the settlement, Jessica L. Rich, Director of the FTC’s Bureau of Consumer Protection, stated, “Inaccurate information in a consumer reporting agency’s file can have a huge impact on a person’s everyday life, starting with their check being denied at the grocery store. In this case, we alleged that Certegy delivered a one-two punch: the company not only failed to assure that the information it provided to retailers was accurate, but it also failed to follow proper dispute procedures. Today’s settlement will benefit consumers who use checks to pay for essential goods and services, including many older consumers and people without alternate means of payment, such as credit cards.”

Companies: Certegy Check Services, Inc.

MainStory: TopStory ConsumerCredit EnforcementActions FairCreditReporting

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