Regulation

TeleCheck to pay $3.5 million to settle allegations of FCRA violations

TelecheckTeleCheck, one of the largest check authorization firms in the U.S., and debt-collection affiliate TRS Recovery Services agreed on Thursday to pay $3.5 million to settle charges with the FTC over alleged violations of the Fair Credit Reporting Act.

The settlement—the second-largest settlement ever collected by the FTC in an FCRA case—relates to charges by the FTC that Texas-based TeleCheck did not adhere to proper dispute procedures, failed to follow procedures to assure the “maximum possible accuracy” of information provided to merchant clients and failed to promptly correct errors on consumer reports.

Under the FCRA, consumers whose checks are rejected based on information provided by TeleCheck to the merchant have the right to dispute the information and push the company to investigate and correct any inaccuracies.

Under the terms of the agreement, TeleCheck and TRS were ordered to change their business practices.

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