CHECK SERVICES COMPANY WILL PAY $3.5 MILLION SO SETTLE ALLEGED FCRA VIOLATIONS

FROM:  U.S. FEDERAL TRADE COMMISSION
Certegy Check Services to Pay $3.5 Million for Alleged Violations of the Fair Credit Reporting Act and Furnisher Rule

Penalty is Second-largest in a Fair Credit Reporting Act Matter
Certegy Check Services, Inc., one of the nation’s largest check authorization service companies, has agreed to pay $3.5 million to settle Federal Trade Commission charges that it violated the Fair Credit Reporting Act (FCRA).

Certegy, based in St. Petersburg, Florida, is a consumer reporting agency (CRA) that compiles consumers’ personal information and uses it to help retail merchants throughout the United States determine whether to accept consumers’ checks.  Under the FCRA, consumers whose checks are denied based on information Certegy provides the merchant, have the right to dispute that information and have Certegy correct any inaccuracies.

The FTC’s complaint alleges, among other things, that Certegy did not follow proper dispute procedures.  The complaint further alleges 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.

Among other things, the settlement requires Certegy to make improvements in these areas.  This case is part of a broader initiative to target the practices of data brokers, which often compile, maintain, and sell sensitive consumer information.  Consumer reporting agencies like Certegy are data brokers that sell information to companies making important decisions about consumers, such as their ability to get credit or pay for goods and services by check.

“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,” said Jessica L. Rich, Director of FTC’s Bureau of Consumer Protection.  “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.”

In addition to the allegations described above, the complaint alleges that Certegy violated the FCRA by failing to create a streamlined process for consumers to obtain free annual reports that they are entitled to; and establish and implement reasonable written policies and procedures regarding the accuracy and integrity of information it furnishes to other CRAs.  This is the first Commission action alleging violations of the Furnisher Rule, which went into effect on July 1, 2010.  The settlement requires Certegy to comply with the Furnisher Rule, as well as the requirement to maintain a streamlined process so that consumers can request their free annual reports.