News, Regulation

Certegy Check Services agrees to $3.5 million FTC settlement

150px-US-FederalTradeCommission-Seal.svgCertegy Check Services recently agreed to pay $3.5 million to settle charges that the company violated the Fair Credit Reporting Act by allegedly failing to follow procedures to ensure the accuracy of information provided to its retail clients.

The company compiles consumers’ personal data and uses it to help retail merchants across the U.S. determine whether or not to accept a check. Under the FCRA, consumers whose checks are denied based on information Certegy provides the retailer have the right to dispute the information and correct any inaccuracies.

The settlement requires the company to make improvements in ensuring data accuracy, part of a broader initiative to target the practices of data brokers—firms that compile, store and sell consumers’ personal information.

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

The FTC also alleges that Certegy violated the law by failing to create a streamlined process for consumers to obtain the free annual reports, to which they were entitled. Certegy is required to comply with the Furnisher Rule, as well as the requirement to maintain a process for consumers to obtain their free annual reports.

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