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ISPLA News: FCRA 2nd Largest Settlement

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  • Peter Psarouthakis
    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 an FCRA
    Message 1 of 1 , Aug 15 5:39 PM
      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 an FCRA 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 Check Services, Inc., a Delaware corporation with offices based out of St Petersburg, Florida, is a "nationwide specialty consumer reporting agency'' that compiles and maintains files on consumers on a nationwide basis relating to: (1) medical records or payments; (2) residential or tenant history; (3) check writing history; (4) employment history; or (5) insurance claims." Certegy also compiles and maintains files relating to, inter alia, the check-writing history of individuals who reside in most, if not all, of the fifty United States and the District of Columbia.

      It 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, among other things, alleges 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. Their accuracy of report information and practices in connection with the reinvestigation of disputed information were outlined in the civil federal complaint reviewed by ISPLA today.

      Among other things, the settlement requires Certegy to make improvements in these areas. This case is part of a broader FTC 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. In addition to violating the FCRA, they were also charged with violating provisions of the FTC Act, FACT Act and Dodd-Frank Act.

      A federal civil action brought by the Department of Justice, Civil Division Consumer Branch, with the assistance of the FTC’s Division of Privacy and Identity Protection, captioned USA v. Certegy Check Services, Inc. was filed at the U.S. District Court for the District of Columbia. The 16-page federal civil complaint dated August 15, 2013 is available at:


      As ISPLA enters its fifth year in representing investigative and security professionals, we are grateful to our colleagues who have generously contributed to our efforts to combat unduly restrictive regulation and ill-conceived legislation. It is from the ISPLA membership and the members of the professional associations that call upon our government relation services that we are enabled to continue as your representative.

      Information about ISPLA and how you can ISPLA’s Political Action Committee is available at:


      Bruce Hulme
      ISPLA Director of Government Affairs
      235 N. Pine Street, Lansing, Michigan 48933

      Your Proactive Voice from State Capitols to the Nation’s Capitol
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