Regulators are turning up the heat on specialty consumer reporting agencies, which are bound under the Fair Credit Reporting Act (FCRA) to maintain accurate files on consumers and afford them the opportunity to challenge errors. These so-called data brokers compile and sell sensitive information, typically financial in nature, that can trip up consumers who are mislabeled as problematic.
As part of a crackdown on this sub-sect of reporting firms, the Federal Trade Commission (FTC) in 2012 reached a $2.6 million settlement with an employment background screening company that it accused of violating the FCRA by failing to comply with proper dispute procedures.
Now, the watchdog has taken similar action against Certegy Check Services, one of the biggest check-authorization services in the country. Its investigation was grounded in complaints that consumers were not being allowed to write checks at retail locations, despite having the money in their account and, in some cases, having no previous record of bouncing checks. The FTC charged Certegy with violating the FCRA -- also because of its dispute process -- and won a $3.5 million settlement. Ed Mierzwinski of the U.S. Public Interest Research Group said the pact will benefit older consumers who shun credit cards as well as spenders who lack access to credit.