InfoBytes Blog
FTC order targets credit reporter for UDAP violation
On April 7, the FTC finalized an order against a respondent business credit report provider to settle allegations that the respondent engaged in deceptive and unfair practices by failing to provide businesses with a clear, consistent, and reliable process to fix errors in their credit reports, even though the respondent was selling products to those businesses that purported to help the businesses improve their reports. The FTC’s administrative complaint also claimed that the respondent’s telemarketers deceptively pitched another service to businesses and falsely claimed that the businesses had to purchase the service in order for the respondent to complete the business’s credit profile. In addition, the respondent allegedly failed to disclose to businesses that the service’s subscription automatically renewed each year and that other renewal practices could lead to increasing costs (covered by InfoBytes here). Under the terms of the final order, the respondent is required to make substantial changes to its processes and provide refunds to harmed businesses. Measures include (i) deleting disputed information free of charge or conducting a reasonable reinvestigation to determine the accuracy of disputed information in a report of a business; (ii) complying with specific time periods within which to promptly investigate and correct errors; (iii) informing businesses of investigation results and providing businesses with free access to the revised information; (iv) making clear disclosures to businesses about the rate at which the firm accepts subscribers’ requests to add payment history information, as well as its limits for providing assistance in adding such information; (v) allowing current subscribers to cancel their services and obtain refunds; and (vi) placing restrictions on the respondent’s ability to automatically renew subscriptions or switch subscribers into a more expensive product.