One of the largest U.S.
consumer reporting agencies, Equifax Information Services LLC, has agreed to
settle Federal Trade Commission charges that it improperly sold lists of
consumers who were late on their mortgage payments. In two separate actions,
both Equifax and the companies that allegedly bought and resold the
information from it will pay a total of nearly $1.6 million to resolve charges
that they violated the FTC Act and the Fair Credit Reporting Act (FCRA).
The two settlements are part of the FTC's ongoing efforts to protect consumers
in financial distress and to protect consumer privacy. Equifax will pay
$393,000 to resolve allegations that its inadequate procedures led to the
sale of lists of consumer information to firms that should not have received
them. According to the FTC, Equifax sold more than 17,000 prescreened lists
of consumers to companies including Direct Lending Source, Inc., which
subsequently resold some lists to third parties, who used their data to pitch
loan modification and debt relief services to people in financial distress.
As part of a separate settlement, Direct Lending Source will pay a $1.2
million civil penalty, and will be barred from using or selling prescreened
lists without a permissible purpose, or in connection with solicitations for
debt relief or mortgage assistance relief products or services.
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