FTC alleges UDAP violations by credit report provider
On January 13, the FTC announced a proposed order to be entered into with a business credit report provider (respondent) alleging that the respondent engaged in deceptive and unfair practices. According to the FTC’s complaint, the respondent failed to provide businesses with a clear, consistent, and reliable process to fix errors in their credit reports even though the respondent was selling those businesses products that purported to help them improve their reports. The FTC’s complaint also alleged that the respondent’s telemarketers deceptively pitched another service to businesses and falsely claimed that the businesses had to purchase the service for the respondent to complete the business’s credit profile. In addition, the respondent allegedly did not disclose to businesses that the service’s subscription is automatically renewed each year, nor did it properly disclose other renewal practices that led to increasing costs. Under the terms of the proposed order, the respondent would be required to, among other things: (i) comply with specific periods of time within which to promptly investigate and correct errors; (ii) inform businesses of the results of their investigations; (iii) provide businesses with free access to the revised information; and (iv) either delete the disputed information or perform a reinvestigation of the information to confirm its accuracy when a business informs the respondent of incorrect information in its report. Additionally, the proposed order would require the respondent to provide refunds to certain businesses that purchased its service products between April 2015 and May 2020, and to provide opportunities for many current customers to cancel their services and obtain refunds.